Fitch: U.S. Commercial Real Estate Market Volatility Continues to Fall.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Volatility in commercial real estate markets throughout the U.S. continues to decline as the latest Property Market Metric (PMM PMM Purchase Money Mortgage PMM Project Management Methodology PMM Perpetual Motion Machine PMM Permanent Magnet Motor PMM Professional Murder Music (band) PMM Precision Measuring Machine PMM Power Management Mode ) annual report from Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. shows a five basis-point (bp) drop in 2005 compared to the prior year. E[acute accent]Multifamily, office and industrial volatility scores declined across both primary and secondary markets, while retail market volatility was mixed. Primary retail market volatility fell while secondary retail market experienced greater volatility. Primary and secondary hotel markets experienced higher volatility in 2005. E[acute accent]Primary retail volatility fell 5 bps to 2.16 while secondary retail volatility increased 11 bps to 3.46 in 2005. Lingering concerns in the retail sector may lead to greater volatility, according to Senior Director Patty Bach. "The pressure of rising interest rates, higher energy costs and a potentially weaker housing market may further hinder the spending power The power of legislatures to tax and spend. Spending power is conferred to state and federal legislatures through their constitution. Judicial Review of legislative spending varies from state to state, but the law of federal spending informs courts in all states. of the leveraged U.S. consumer," said Bach. "This may prove to be particularly burdensome in select primary markets such as Dallas and Fort Worth, where overall volatility has gone up for the last two years." E[acute accent]Hotel volatility also rose 9 bps in 2005 to 4.34 with much of the increase being driven by increased volatility in secondary markets. Primary hotel markets experienced a slight increase of one bp to 4.11. "Although the hotel sector has recovered from the severe downturn in 2001-2002, the sector's historical volatility Historical Volatility The past standard deviation of a security that is used in security analysis. Standard deviation measures the changes in the past price of a security the higher the standard deviation the more volatile the security. is not expected to change," stated Bach. E[acute accent]Primary multifamily and office market volatility declined 35 and 16 bps to 1.73 and 2.55, respectively. New Orleans was the only primary multifamily market that experience greater volatility. Lower volatility scores were recorded for primary office markets including Orlando, Jacksonville and Austin. E[acute accent]The report, '2006 PMM Update: Volatility Continues to Improve' is available on the Fitch Ratings web site at www.fitchratings.com. E[acute accent]Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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