Moody's Investors Service's released its National CPPI index for August, which showed a 2.4% monthly rise  in commercial real estate (CRE) prices.

The CPPI index has currently risen for four straight months and is 15.3% above the lows in April 2011. The increase was attributed partly to the decline of the distressed transaction share. These deals typically sell for lower valuations. Distressed share of all repeat sale transactions dropped to 21.7%, which is down 5.9% from last month. At the same time, distressed prices dipped 3.5% from July numbers.

Barclays Capital analysts said that they do not view the CPPI increase as a positive for the market. Tt might actually even be seen as a negative sign, which showes that there are less distressed transactions being closed now potentially a result of the lack of financing.

In light of the current macroeconomic troubles and the tightening of lending standards, Barclays analysts said do not think a broad-based, sustainable appreciation of CRE prices in the near term.  

Analysts expect lending capital to be available for the trophy properties in top-tier markets where performance continues to be divorced from the rest of the market. The Moody's Six-City index tracking prices in major Tier 1 centers showed a rise over just 0.8% in August. Given this, BofA Merrill analysts said that the future CPPI index reads will be more dependent on the volume of distressed deal in the upcoming months versus the price dynamics.

Tad Philipp, Moody's director of commercial research, said in the report that while distressed sales may be near their high-water mark he does not expect a significant increase in CRE prices near-term due to the slowdown in originations stemming from wider securitized commercial mortgage spreads.

Events like the fiscal troubles in Greece have caused the spread widening in the commercial mortgage-backed securities market, Philipp said in a recent interview.

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