Commercial Real Estate Tornado hit Texas

Commercial real estate values are continuing their downward spiral, dropping 8.6 percent in April, according to a report released Wednesday by Moody's Investors Services and Real Estate Analytics.

That's the largest one-month nationwide decline on record. And the Southern region of the U.S., which includes Texas, is seeing the worst declines. Prices for investment properties in the Southern sector of the country are off more than 20 percent in the last year, Moody's researchers said.

U.S. commercial real estate values are down 29.5 percent from their peak in late 2007. "The question is will this mark the bottom or not," said Neal Elkin of Real Estate Analytics.
The biggest declines have come in the office sector, where prices are down about 29 percent nationwide from a year ago. And shopping center values have fallen 18.5 percent.
Another recent commercial property report predicts that the Dallas area will have the largest decline in office prices in the country during the coming year. That forecast last week by PricewaterhouseCoopers predicts that the commercial real estate market won't begin to recover until 2011.

Some industry watchers are even more pessimistic. The top analyst for Deutsche Bank's Commercial Mortgage Backed Securities operation predicted last week that the U.S. property market won't recover until 2017. "We are currently in something which is comparable to what we saw in the 1990s and potentially worse," Richard Parkus said at a New York real estate summit sponsored by the Reuters news agency. By STEVE BROWN / The Dallas Morning News stevebrown@dallasnews.com


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