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You are here: Home / Bay Area Real Estate News / NAR Commercial Market Insights

May 14, 2021 by Peter Maclennan 1 Comment

NAR Commercial Market Insights

The National Association of Realtors has released its March 2021 edition of its Commercial Market Insights. Here is a brief summary of some relevant highlights.

Commercial Transaction Volume

Commercial Sales Transaction Volume in March of 2021 was down 28% from the prior year on transactions in excess of $2.5 million. The only sector that saw an increase in transaction volume year-over-year was hotels. This is likely due to opportunistic investors moving into the space.

National Commercial Real Estate

Commercial Cap Rates

As the commercial market stabilizes, commercial cap rates will continue to decline. Lower cap rates contribute to higher prices. National cap rates for properties above $2.5 million, apartments averaged lowest cap rate at 4.9% with industrial properties averaging 5.9%.

For properties below $2.5 million Class A apartments had the lowest cap rate of 5.7%, Class B Apartments at 6.4%, and industrial averaged 6.8%

Leasing Activity

Office leasing continues its negative trend of absorption. Since Q2 of 2020 the cumulative total negative net absorption of 138.4 million square feet. This trend is not surprising as many companies are adjusting to Work From Home (WFH) and adapting their office use accordingly.

Industrial absorption rose 82.7 millions square feet in 2021 Q1 and was net positive 309.7 million square feet for the past 4 quarters. This trend is not surprising either as we have seen an increase in online shopping, which is dependent on warehouse and “last mile” storage.

Bay Area Commercial Real Estate

The commercial real estate market in the Bay Area contributes to national trends, but varies from national trends at many times. The old adage in real estate is “Location, location, location.” Trends in the San Francisco Bay Area very from area to area as well.

It is imperative that you work with a real estate professional that knows what is happening in your region and with your property type. For advice on how to navigate your specific commercial real estate question, please call Peter Maclennan at 925.385.8798.

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Filed Under: Bay Area Real Estate News, Commercial Leasing, Contra Costa Real Estate, Real Estate Investing Tagged With: Commercial Real Estate, Commercial Real Estate Broker

About Peter Maclennan

Peter Maclennan is a Real Estate Broker at Maclennan Investment Group, Inc. a real estate brokerage and advisory firm. From novice investors to institutional property owners Peter provides tailored service to his client's needs. Call him today to discuss your real estate need at (925) 385-8798 or visit him on the web at https://www.maclennaninvestments.com. CA DRE License#01801793

Comments

  1. Click now says

    March 7, 2022 at 5:26 am

    Thanks for this great and useful content.

    Reply

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