Commercial real estate prices continued falling in June, according to the Moody's/REAL Commercial Property Price Indices (CPPI), which recorded a 3.3% monthly decline, marking a 9.6% decrease from year-ago levels.

June is the fourth straight month the index has declined. The CPPI now stands 11.8% below its peak in October 2007.

All four property types measured in the index posted negative returns in the second quarter. The national industrial market saw the largest drop in prices, with a return of -9.3% during the quarter, while the national apartment market returned -7.1%, offices saw returns of -5.9%, and retail saw a -4.6% return.



The volume of transactions dropped significantly throughout the first half of 2008, declining more than 25% from the first half of 2007.

"While the June uptick may be the first sign of stabilizing transaction volumes that in turn could portend future price stabilization, it may also be a transient or seasonal effect, and future data will need to be examined in order to identify any trends," said Moody's managing director Nick Levidy.

The CPPI is based on the repeat sales of the same properties across the U.S. at different points in time in an effort to provide transparency and methodological rigor, while reducing distortions that can occur with other commercial property value measurements such as appraisals or average prices.

By Patrick McGee and edited by Nancy Girgis