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Commercial Real Estate Poised for Comeback in 2011

December 28, 2010

Reuters reports:

Commercial real estate prices rose more than 4 percent in September, according to ratings agency Moody’s Investors Service. This marked the largest increase in the index since it began tracking prices. They rose again in October by 1.3 percent. Prices, however, were still down nearly 42 percent from the October 2007 peak.

Commercial real estate sales are expected to finish 2010 above $100 billion, double the amount seen in 2009 but well below the $520 billion of deals done in 2007, according to Real Capital Analytics.

The commercial mortgage-backed securities market, once a big source of financing for developers and property owners, is still moribund. In 2010, new issuance totaled around $22 billion, more than double 2009’s level, but well below the nearly $250 billion seen at the height of the boom in 2007. It’s also half the volume seen in 2000, according to Thomson Reuters data.

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