Nothing to see here - CPPI up 4.1%

December 2009 commercial property prices shot up 4.1% according to Moody's CPPI index, providing journalists and analysts the world over an opportunity to call an early bottom... (No link, on BBG)

The Moody’s/REAL Commercial Property Price Index climbed 4.1 percent from November, the second straight monthly increase, Moody’s said today in a report. Transaction volume rose more than 75 percent. Values are down 29 percent from a year earlier and 41 percent lower than the peak in October 2007.
“Two months of positive returns and one month of higher transaction volume does not allow us to discern a trend just yet, particularly in light of the fact that year-end commercial real estate activity can distort the true condition of the markets,” the report said.

Run for the Hills!!!! AAA Downgrades are coming...

Not sure if that is Tad Philipp enjoying his new found freedom on the buy side, or Nick Levidy chasing a couple of the weaker AAA broads bonds through the valley as he thins the herd.

Moody's is going to whack AJs down half a dozen notches over the next couple of months according to a release to day.

the junior Aaa-rated classes, to be downgraded by four to five notches on average.

Expect losses of just 5% on average (seems low).

Moody's generally rated conduit and fusion transactions from 2006 through 2008 to an expected loss of about 2%, but now expects that deals from these vintages will experience losses of approximately 5% on average.

Credit problems on the horizon? Who'da'thunk...

"Early in the current economic crisis, our biggest concern was the impact of a liquidity crunch on commercial real estate," says Moody's Senior Vice President, Michael Gerdes. "However, Moody's now expects a significant overall decline in property cash flows as a result of a higher incidence of tenant defaults and bankruptcies and a sharp decline in lease renewal rates."