Commercial Realty Values May Lose Some Ballast.

Washington -- Commercial property prices are not likely to go up in 2008 as much as they did in previous years, according to the National Association of Realtors.

It is likely that property prices will soften considering that capitalization rates (the discount rates used by commercial real estate investors to arrive at property valuations) are already very low and are only likely to go up.

This means "the era of rapid commercial property price increases has ended," the Realtors' trade group said in a fourth-quarter 2007 commercial real estate outlook report.

And foreign buyers are expected to take advantage of the weak dollar and be more active.

Although the credit crunch has been impacting the commercial real estate sector in the last few months, 2007 has set a record for commercial real estate investment, the NAR reports.

However, tighter credit conditions mean that some individual investment deals may not be able to get done.

A record $325 billion was invested in commercial real estate in the first 10 months of 2007, up from $306.8 billion for all of 2006, the trade group reports.