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NEW YORK-One year after the troubles began in the US capital markets and the nation’s economy, one report on the impact of those woes on the office market sees investor confusion rife with contradictory signals. Another report echoes similar sentiments, but throws in the effect from earlier sales like Equity Office Properties.

Robert White, president of New York City-based Real Capital Analytics, has released his analysis of the unofficial anniversary of the credit crisis. Likewise, so have CB Richard Ellis Capital Markets and Torto Wheaton Research. The two reports share many of the same observations and conclusions.

White points out that his company’s latest sales figures show that the office sector “has fared better with transaction activity starting to grow and prices not down as much as for other property types.” Overall, however, he observes that “one year after the onset of the credit crunch, recent sales data paint a picture of continuing investor confusion rife with contradictory signals.”

Those contradictory signals result from quite a mixed bag of statistics, according to the reports by White and CBRE-Torto Wheaton researchers. “The monthly snapshot of office sales was clearly discouraging in July, the latest month for which figures are available–with sales of office properties off 80% year-over-year, at $3.6 billion, for the slowest July since 2003,” White writes. On the other hand, he points out that more than 100 significant office properties sold in July, of which $2.1 billion were suburban assets and $1.5 billion were CBD properties.

The CBRE-Torto Wheaton analysis shows that transaction volume in the office market “peaked with the EOP portfolio buyout and subsequent transactions,” producing what the researchers describe as an “artificial high” of market activity and pricing in 2007. The office market activity thus far this year is “roughly 60% of the pace set in a more normal period like 2004 and 2005,” the team states.

Pricing has not fallen nearly as much as the number of sales, according to CBRE-Torto Wheaton. Prices have fallen roughly 15% from second quarter 2007 to the second quarter 2008–with office assets selling for $241 per sf across all TWR-tracked markets. The CBRE-TWR analysis is that the decline in pricing is not especially severe when viewed in context of the impact of the EOP deal and other portfolio trades in the months and years before the credit crunch arrived. Many EOP assets were higher-quality properties, which “rightly commanded some sort of premium,” the researchers conclude.

In addition, the CBRE-TWR team points out that “with so many high-quality assets trading two or three times in early 2007, as the EOP portfolio was dismembered, it would be difficult not to see a falloff in sale prices.” In light of those factors, a 15% decline in prices is not particularly severe, they suggest.

CBRE-TWR’s researchers mention some of the same contradictions listed in the Real Capital Analytics report. “With uncertainty regarding future market conditions and disparate expectations between buyers and sellers,” they say, “it’s no wonder that transaction volume has faded. One year into the credit crisis, the factors driving hesitancy and slow volume of the market are still in force.”

Real Capital Analytics’ White notes in his review of the statistics that “there are signs that transaction activity for office properties has hit bottom and is poised to rise.” His firm is looking forward to seeing the results for September, which is “traditionally a time for refreshed market activity,” White adds.

White points out September is one of the most active months for sellers to list properties for sale although the expected wave in offerings will add to a backlog of early 2008 offerings that are still on the market. One of the questions that Real Capital Analytics will be asking in looking at September’s results is whether sellers “are ready to accept pricing that better reflects existing market conditions and entices buyers back to the market in force.”

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