Commercial property sales prices in the United States posted their greatest quarterly fall in 22 years, according to an index developed by the Massachusetts Institute of Technology Center for Real Estate.
According to MIT, commercial real estate values fell 10.6 percent in the fourth quarter of 2008, surpassing the record fall of 9 percent seen in the fourth quarter of 1987.
The index tracks the prices that institutions, such as pension funds, pay or receive when buying or selling commercial properties, which include office buildings, apartment complexes and retail shopping malls.
The demand index, which tracks prices potential buyers are willing to pay, has fallen for the past six quarters, and is down 23 percent for the year and 31 percent since its mid-2007 peak.
In New Jersey, prices are dropping for underperforming office buildings by as much as 48 percent for properties which were purchased less than three years ago.
With the recession, uncertainty in the market and a weak leasing market in New Jersey, expect dropping prices to continue for at least 12 to 18 months.