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US office prices rise for first time since 2007

According to research by ratings agency Moody’s and Real Capital Analytics, US office prices rose 4.1% in the second quarter, compared to an 18.6% in Q1. The increase was the first for two years.

US office prices have risen for the first time since the tail-end of the property boom in 2007, the Financial Times reported.

Citing research by Moody’s and Real Capital Analytics, the newspaper said that in the second quarter of the year, from April to June, US office prices rose by 4.1 percent. In the past 12 months alone, the sector saw a decline reflecting a fall of 27 percent.

The research revealed, however, that while office prices on the whole had risen, the increases were largely centred in and around secondary cities while the country’s main cities continued to witness declines.

In other real estate asset classes, the research concluded that industrial, retail and apartment buildings continued to suffer pricing drops.

The jump in prices in Q2 reflected a stark contrast to Q1 when the sector fell by 18.6 percent.

In addition, Moody’s also said that transaction levels across the sectors in the US, had risen by 50 percent in June from May although some analysts interviewed by the FT warned that the property market still faces “serious headwinds” and that “any spike” could be as a result of a rise in distressed property sales.