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

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"For the second straight month, and the second time in thehistory of the index, the national composite recorded a negativeannual growth rate, but there are some potential signs ofimprovement 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 foursectors had negative returns for the month and year-over-yearperiod. Office recorded its lowest annual return in its history,-3.1%."

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On the positive side, Blitzer notes that apartments recordedpositive returns for the one-month and 12-month periods, withindices up 1.6% and 1.7% respectively. However, the geographicregions reported mixed results. The Pacific West had the highestreturn for the month of September, up 1.1%, but was the only regionthat was in negative territory over the one-year period, with itsindex declining -4.1%.

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"On the other hand, the two best returning regions for the12-month period, the Midwest and the Mid-Atlantic South, were theworst performing sectors for the month," Blitzer says. "Overall,the data are not pointing to one clear direction in commercial realestate prices. We cannot tell if this is just a temporary pause inthe decline of commercial real estate prices or have we reached thebottom and a turnaround is imminent."

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The indices measure the change in commercial real estate pricesby property sector and geographic region in the US. The S&P/GRAindices comprise 10 commercial real estate indices: a nationalcomposite, five geographic regions--Northeast, Mid-Atlantic South,Midwest, Desert Mountain West and Pacific West--and four nationalproperty sectors--office, apartment, retail and warehouse. To beeligible for the indices, property sales must be identified asclosed transactions, according to S&P.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.