Aug. 19 (Bloomberg) -- Commercial real estate values in the U.S. fell 27 percent in the year through June and rents for offices, shops and warehouse space may continue to drop through 2010 as the recession saps jobs and consumer spending.

The Moody’s/REAL Commercial Property Price Indices fell 1 percent in June and are down 36 percent from their October 2007 peak, Moody’s Investors Service said in a report today. A rebound isn’t likely until the second half of next year, the National Association of Realtors forecast in a separate report.

Unemployment of 9.4 percent, falling industrial production and a drop in consumer spending curbed property demand, NAR said. Falling rental income and scarce credit are hurting both landlords and investors in securities backed by commercial property loans. Defaults and late payments on commercial mortgage-backed securities may surpass 7 percent by year-end, according to research firm Reis Inc.

“It’s too soon to call the bottom,” said Connie Petruzziello, a Moody’s analyst and co-author of the commercial property price report.

The 1 percent drop in Moody’s index is the smallest monthly decline since February, when it fell by 0.6 percent. The measure fell more than 7 percent in both April and May.

Quarterly Office Gain

The Moody’s survey found a 4 percent increase in office prices in the second quarter compared with the previous three months, the only gain among the four property types measured. Industrial properties, mainly warehouses and distribution centers, fell 20 percent in the quarter, while apartments fell 16 percent and retail properties 8 percent.

The reason for the increase in office prices wasn’t immediately evident, said Neal Elkin, president of Real Estate Analytics, a New York firm that provides the data for the Moody’s report.

Office rents likely will fall 14.1 percent this year and 10 percent in 2010, the Chicago-based Realtors organization said. Rents for industrial space may drop 11 percent this year and almost 12 percent in 2010, while retail rents will fall 6.1 percent in 2009 and 4.9 percent next year, NAR said.

“The reduction in commercial real estate activity is expected at least through the first quarter of 2010,” NAR chief economist Lawrence Yun said today in a statement. “Any meaningful recovery is not likely to occur before the second half of next year.”

Dollar Value

The dollar value of commercial property sales climbed almost 40 percent in June from May to $4.4 billion, according to Moody’s.

Elkin called the increase a hopeful sign.

“We shouldn’t be popping champagne bottles yet, but one month in the right direction is better than one month in the wrong direction,” he said.

Moody’s/REAL Commercial Property Prices Indices are based on the repeat sales of the same properties across the U.S. at different points in time.

To contact the reporters on this story: David M. Levitt in New York at dlevitt@bloomberg.net; John Gittelsohn in New York at johngitt@bloomberg.net

Last Updated: August 19, 2009 16:05 EDT