Moody's Saying Prices Up, But Not By Much

Moody's just issued an investor report saying commercial real estate prices are up for the first time since January this year. The increase of 1.7% isn't much, and we view it as statistically irrelevant. The more important factor is that prices are not falling anymore. We do not believe there will be any real increases in cap rates in the foreseeable future. If anything, pricing should continue to improve as the wave of capital continues to roll. That capital is picky, and if fund managers/REITs/investors want to make any money, they are going to have to put that capital to use and start buying out of their strict guidelines. It will be slow, but we are starting to see signs of this.