Moody's Analytics Launches Forecasts of RCA Commercial Property Price Indices
November 18 2015 - 10:00AM
Business Wire
Forecasts show US commercial property prices to cool on
coasts, rise in central and southeastern US by 2020
Commercial real estate prices are poised to cool on the coasts,
while those in the central and southeastern US are set to rise more
quickly by the end of the decade, according to newly launched
Moody’s Analytics forecasts of the Real Capital Analytics
Commercial Property Price Indices (RCA CPPI™).
The RCA CPPIs measure changes in commercial property prices
nationally and across major US markets. Moody’s Analytics generates
forecasts of the indices over a 30-year horizon to identify
expected commercial property price trends under various economic
scenarios.
According to the Moody’s Analytics outlook, commercial property
markets are overvalued in New York, Boston, Oakland and San
Francisco. Recent price gains have outstripped the growth in these
economies’ underlying fundamentals, weighing on future property
price appreciation.
In contrast, commercial real estate prices in Atlanta,
Jacksonville, Ohio and Chicago are undervalued, and thus expected
to rise more quickly in coming years. Markets are generally
undervalued through the central and southeastern US.
“As the decade unfolds, national commercial property price gains
are expected to slow meaningfully, crimped by rising interest rates
and increased supply, especially in the markets that are currently
hottest,” said Mark Zandi, Chief Economist at Moody’s Analytics.
“Using our forecasts of the RCA CPPI, investors can assess the
impact of economic and financial market conditions on their
commercial real estate portfolios, reduce risk exposures, and
optimize their decision making.”
The forecasts are available with Moody’s Analytics alternative
economic scenarios, as well as the adverse and severely adverse
scenarios set by the US Federal Reserve for stress-testing
purposes. Based on Moody’s Analytics robust economic models, the
forecasts are informed by global economic conditions and the
relationships among economic variables like employment, spending
and production.
“RCA’s investment market data and analysis cover markets all
over the world and are geared to the needs of all segments of the
real estate community – buyers, developers, brokers and lenders,"
said Bob White, founder and President of Real Capital Analytics.
“We believe that Moody’s Analytics forecasts of the RCA CPPIs offer
a unique insight into commercial real estate prices and fill an
important gap in the marketplace.”
Moody’s Analytics forecasts of the RCA CPPI cover more than 200
indices that measure price changes for all major commercial
property types in the US, including apartments, hotels, and
industrial, business and retail offices, across 20 states, 10
regions and 31 markets.
For more information on Moody's Analytics forecasts of the RCA
Commercial Property Price Indices, visit
www.economy.com/rca-cppi.
About Moody’s Analytics
Moody’s Analytics helps capital markets and risk management
professionals worldwide respond to an evolving marketplace with
confidence. The company offers unique tools and best practices for
measuring and managing risk through expertise and experience in
credit analysis, economic research and financial risk management.
By providing leading-edge software, advisory services, and
research, including the proprietary analysis of Moody’s Investors
Service, Moody’s Analytics integrates and customizes its offerings
to address specific business challenges. Moody's Analytics is a
subsidiary of Moody's Corporation (NYSE: MCO), which reported
revenue of $3.3 billion in 2014, employs approximately 10,200
people worldwide and maintains a presence in 35 countries. Further
information is available at www.moodysanalytics.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20151118006178/en/
Moody’s AnalyticsPranita Sookai, 212-553-4181Associate
Communications Strategistpranita.sookai@moodys.com
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