Retail, Limited-Service Hotel Sectors Show Better Fundamentals.(markets)

NEW YORK -- Two commercial property sectors showed an improvement in the last quarter of 2005, while three showed minor deterioration, reports Moody's Investors Service.

The retail and "limited-service" hotel sectors were the ones that improved, compared to the third quarter of 2005, while the industrial, downtown office and multifamily property sectors were the ones that declined.

And the suburban office and "full-service" hotel sectors remained unchanged in their performance, Moody's said.

The Moody's report scores commercial property markets nationwide on a scale of zero to 100, with properties in the 0-33 range falling in the weak category, those in the 34-66 range in the middle category and those in the 67-100 range identified as strong markets.

Based on this methodology, the rating agency identifies the worst U.S. markets for the fourth quarter, with scores for the previous period in parenthesis, as Trenton, N.J., 40 (37); Hartford, Conn., 44 (48); Jacksonville, Fla., 45 (45); San Antonio, 52 (60); Las Vegas, 53 (57); Atlanta, 53 (54); and Wilmington, Del., 53 (66).

The five best markets are Los Angeles, 85 (88); Memphis, Tenn., 83 (75); Honolulu, 82 (83); Orange County, Calif., 80 (78); and Tucson, Ariz., 79 (74).

Los Angeles and New York, the cities most frequently represented in commercial mortgage-backed securities issuance, scored 85, down from 88, and 78, up from 73, respectively, Moody's reports.