Market for Commercial Property Increases

The price of U.S. commercial property rose 4.3 percent in September compared to August, the largest increase in 10 years, Moody's Investors Service reported.

The increase appears to reflect a few large transactions. Nick Levidy, a Moody's managing director in New York, said in a statement: "The relatively large swings seen in the index recently are due in part to the uncertain macroeconomic environment and the effects of a thin market with low transaction volumes."

Demand driving increases includes investors seeking the best office buildings in major markets like New York and Washington, says Robert Bach, chief economist for Grubb & Ellis Co.

But Bach says there appears to also be increased interest in well-leased commercial properties in smaller markets.

Source: Bloomberg, Brian Louis and David M. Levin