This weekend we received the July Commercial Real Estate price report from CoStar.
The optimism in the market over the past few months has stemmed from the rise in prices for the most attractive properties in the most attractive locations in the country. These properties are known as investment grade.
This past month the investment grade property prices rolled over, posting a month over month loss. (Along with all other commercial property which has experienced uninterrupted free fall)
The chart below shows the decline. (Investment grade in blue)
The dead cat bounce we have seen in the economy and stock markets due to the short term artificial stimulus has sucked a tremendous amount of money back into these A+ properties.
As the economy rolls back over these investors will be slaughtered during the next wave down.
This will bring on a national pessimism toward the real estate sector that this country has never seen. That moment will provide the buying opportunity that savvy investors are now waiting for.