Volatility in U.S. commercial real estate markets continued to decline in 2005, according to Fitch Ratings.The latest reading of Fitch's Property Market Metric showed a 0.05% decline in volatility in 2005 from that of 2004. Volatility scores for multifamily, office, and industrial properties declined across primary and secondary markets, while retail market volatility was mixed. New Orleans was the only primary multifamily market that experienced greater volatility, Fitch said. In the retail sector, primary retail market volatility fell 0.05%, while secondary retail markets saw greater volatility of 0.11%. Primary and secondary hotel markets experienced higher volatility in 2005. Lingering concerns in the retail sector may lead to greater volatility, according to Patty Bach, a Fitch senior director. "The pressure of rising interest rates, higher energy costs, and a potentially weaker housing market may further hinder the spending power of the leveraged U.S. consumer," Ms. Bach said. "This may prove to be particularly burdensome in select primary markets such as Dallas and Fort Worth, where overall volatility has gone up for the last two years." Fitch can be found online at http://www.fitchratings.com.

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