Moody's: CRE Improving
Commercial real estate markets across the country have shown either moderate improvement or were stable during the fourth quarter of 2010, according to a Moody’s Investors Service study.
The ratings agency said six of the seven property types in U.S. commercial mortgage-backed securities had “yellow”--which indicates middling strength--scores last quarter. Only the multifamily sector had a strong score, which was unchanged since Q3.
The limited-service hotel and suburban office sectors showed the most improvement during the latest quarter, according to the study. The five best markets were Honolulu, New York City, Los Angeles, the District of Columbia, and California’s Orange County.
The slow but increasing stability comes after commercial real estate was pummeled during the recession as reduced occupancy rates and rents put pressure on property owners, often causing them to fall behind on interest payments.
“The commercial real estate markets are continuing down the road to recovery, though the fact that most markets remain yellow indicates that a comfortable point of stability has not yet been reached,” said Moody’s Vice President Keith Banhazl.