Following strings of advancements from the previous months, property prices in the commercial sector suffered a steep decline in June as analysts observed that investments allocated for real estate primary markets have either started whittling down or eventually drying up.

Industry experts said that the commercial real estate industry has been long dependent on institutional capitals, which poured substantial amount of investments on vast metro market segments, fueling price increases in the sector for the first half of 2010.

On the other hand, the property sector’s broader commercial markets were largely overlooked by investors, resulting to plunging prices and spawning a two-world effect within the commercial property industry.

Analysts, however, were projecting that the sector’s equilibrium may have been shaken, notwithstanding the presence of institutional investors, as initial results delivered in the month of July showed that investment grade property markets would further slide down.

The past ten months, in fact, were largely characterized by a roller-coaster motion of the overall CCRSI results with the May and June results reflecting a combined slide of 7.78 percent while grade property allocation retreated by 4.83 percent, further canceling out previous gains by the sector.

Analysts said that the commercial property’s decline was mostly confirmed by a CoStar report which showed that the investments grade index was indeed showing gains in the past few months but saw a turnaround in June, which is a downward spiral likely to be replicated in July.

In its July report, which was based on data collected up to June 30, CCRSI said that a total of 665 sales were concluded in the month of June as compared to the 506 sales deal that went through May.

The report even noted that an improvement could be appraised in pair volume sales in the June-May period once compared to the February 2009 transactions, which reflected 374 sealed deals and rendering it as the worst downturn period in terms of pair volume sales.

Also, analysts said that distress had made a considerable mark in the variety of commercial properties being traded in the market as they stressed that portion of distressed sales as against to overall sales climb up from the low of one percent in 2007 to its present status of 23 percent.

The same CCRSI reports found that hospitality properties saw the highest ratio of distress as the segment reported that up to 35 percent of all sales were conducted under distress with the multifamily properties coming in next at 28 percent.

Completing the list of market segments affected by distressed sales were office properties with 21 percent, retail properties with 18 percent and industrial properties registering the lowest ration with its 17 percent distressed sales.