“The Moody’s/REAL All Property Type Aggregate Index measured a 3.3% decrease in August, bringing the index to 105.37. This is the lowest recorded result since the beginning of the downturn, surpassing the old recession level low of 107.98, which occurred in October 2009. National prices are 7.6% below the value recorded last year. Since the peak in October 2007, prices have fallen 45.1%.
The data suggest that the commercial real estate market has become trifurcated, with prices for larger trophy assets rising, prices for distressed assets declining sharply, and prices for smaller but healthy properties remaining essentially flat. One way to view index returns is by looking at the interplay of these three components of the overall market. The index again turned negative this month in part because large negative returns on distressed properties created a drag that outweighed the positive and flat results of the performing properties.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.