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NEW YORK CITY-Commercial property values have yet to reach the bottom and when they do, recovery will be slow and gradual following a “modest” rebound. In the interim, values could decline as much as 55% from their October 2007 peak. That’s the view of Moody’s Investors Service in a report issued Monday.

“We believe that valuations will rebound off the bottom and settle in for the longer term at levels 30%-40% below the market top as liquidity and investors return to the sector and property cash flows begin to recover,” says Nick Levidy, managing director of Moody’s, in a release. Titled “Moody’s Outlook for US Commercial Real Estate and CMBS,” the report predicts a slow rebound on cash flow, hand-in-hand with a growing refinancing risk on CMBS as maturities on the bonds draw nearer.

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