The S&P/GRA national composite for September reported an annual price change of -0.6%, versus September of 2007. This decline is smaller than the -1.6% change in the data for August, according to S&P, and also represents a 0.1% increase from August to September. It is, however, well below the high of +14.7% reported in August of 2006.

"For the second straight month, and the second time in the history of the index, the national composite recorded a negative annual growth rate, but there are some potential signs of improvement in commercial real estate prices," says David Blitzer, managing director and chairman of the index committee at S&P, in a release. He adds, "In the property sector, three of the four sectors had negative returns for the month and year-over-year period. Office recorded its lowest annual return in its history, -3.1%."

On the positive side, Blitzer notes that apartments recorded positive returns for the one-month and 12-month periods, with indices up 1.6% and 1.7% respectively. However, the geographic regions reported mixed results. The Pacific West had the highest return for the month of September, up 1.1%, but was the only region that was in negative territory over the one-year period, with its index declining -4.1%.

"On the other hand, the two best returning regions for the 12-month period, the Midwest and the Mid-Atlantic South, were the worst performing sectors for the month," Blitzer says. "Overall, the data are not pointing to one clear direction in commercial real estate prices. We cannot tell if this is just a temporary pause in the decline of commercial real estate prices or have we reached the bottom and a turnaround is imminent."

The indices measure the change in commercial real estate prices by property sector and geographic region in the US. The S&P/GRA indices comprise 10 commercial real estate indices: a national composite, five geographic regions--Northeast, Mid-Atlantic South, Midwest, Desert Mountain West and Pacific West--and four national property sectors--office, apartment, retail and warehouse. To be eligible for the indices, property sales must be identified as closed transactions, according to S&P.

Instant Insights /

S&P: RE Prices Show National Decline

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