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All major commercial property types were either stable and in strong
condition, or showed slight improvement, based on data gathered through the third quarter of 2002, according to Sally Gordon, the principal author of Moody's Investors Service's "Commercial Mortgage Backed Securities: Red-Yellow-Green Update" released earlier this month.
This signals either continued stability or early signs of economic recovery from the down part of the real estate cycle
And while there is optimism,
Ms. Gordon, also a vice president and senior credit officer with Moody's, cautioned that "one of the problems that the capital markets, in general, are facing are more uncertainties from more sources in this economic recovery than are typical in the business cycle.
"Specifically, there is more uncertainty about war and what kind of war. How long will it be and so on. Usually, when an economy is about to recover, you are simply looking at the industry, interest rates, inventory buildup, manufacturing flows and so on. This time, we have enormous wild cards that are not just business issues."
Putting aside the wild cards, the Moody's update showed a number of conditions expected to positively impact the commercial markets.
Source: HighBeam Research, Moody's: Tempered Optimism for Commercial Real Estate.