U.S. commercial property values dropped for the first time in four months in February as the share of distressed sales rose, Moody's Investors Service said.

The Moody's/REAL Commercial Property Price Index declined 2.6% from January, Moody's said Monday in a report. Prices slid 26% from a year earlier and are down 41.8% from an October 2007 peak.

"We're not back to the absolute bottom," said Christopher Cornell, an economist at Moody's Economy.com in West Chester, Pa.

"We have commercial property prices that remain stuck at depressed levels."

Property owners are having trouble paying back debt and holding on to buildings as unemployment and tenant bankruptcies boost vacancies.

Almost one-third of repeat sales transactions were of distressed properties in February, compared with less than 20% in early 2009, Moody's said.

The delinquency rate for commercial mortgage-backed securities rose to 6.42% in March from 1.59% a year earlier, Moody's said in a report April 13.

The U.S. unemployment rate was 9.7% in March, compared with an average of 5.7% in the last decade.

Office vacancies in the U.S. rose to 17.2% in the first quarter, the highest level since 1994, Reis Inc. said April 5.

A record 8% of apartments were empty in the quarter, while vacancies at the largest retail centers were 8.9%, the highest in at least a decade, the New York research firm said.

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