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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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Reasons for Optimism on April 10

Happy Easter!

Link to video from Peter Maclennan

Wishing that you and your loved ones have a blessed and healthy weekend. Hopefully you will find a way to be physically distant but socially engaged over the holiday weekend.

I have included a few items below to brighten your day or week. My current real estate listings and some art from my daughter.

Resurrection Art by my daughter - The Empty Tomb
My wildly creative daughter drew this in anticipation of Resurrection Sunday.

Reasons for Optimism

These days there seems to be a shortage of good news in the world today. But here is why I am cautiously optimistic these days.

Social Distancing Physical Distancing Working? – Coronavirus Model Revised Down

CNN and other news sources are reporting that one of the influential models tracking the coronavirus pandemic has revised the total deaths number down.

The numbers for California have improved with peak utilization of hospital resources occurring on April 13 and without an overload of hospital resources.

This doesn’t mean that we can stop being vigilant with our handwashing and stop following CDC guidelines.

 Auto Insurers Offering Rebates

I received notice that I will be getting a discount on my auto insurance due to the reduced driving. The EastBayTimes.com is reporting this is occurring with a number of carriers and lists some of the programs offered.

Some Good News by John Krasinski

John Krasinski (of The Office and Jack Ryan) has uploaded two episodes of Some Good News. In the videos he highlights good news from around the web. In the first episode he interviews The Office costar Steve Carell. In the latest installment he surprises a young girl with a Zoom call.

Zoom Surprise: Some Good News with John Krasinski Ep. 2

Maria Told Her Mother Gladly – Humor

Maria came home from Sunday School on Palm Sunday and told her mother that she had learned a new song about a cross-eyed bear named Gladly.

It took her mother a while before she realized that the hymn Maria had been singing was really: “Gladly The Cross I’d Bear.”

Holiday Reading

On Good Friday

Why We Call the Worst Friday ‘Good’

“It was the single most horrible day in the history of the world.

No incident has ever been more tragic, and no future event will ever match it.” 

On Sunday

And as they were frightened and bowed their faces to the ground, the men said to them, “Why do you seek the living among the dead? He is not here, but has risen.”

Luke 24:5-6

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Commercial Real Estate Listings

For Sale – Concord, CA

For Sale Building by Maclennan Investment Group

This high visibility location along Monument Boulevard in Concord, CA is zoned Commercial Mixed-Use (CMX) by the City of Concord allowing a variety of retail and service uses. Learn More…

For Lease – Antioch Warehouse

This open and bright space is ideal for the cabinet maker, the contractor, the plumber, the carpet installer, or other trade. The space contains a small office, a private restroom, and mezzanine space. Keep Reading

For Lease – Martinez R&D Space

2880 Howe Rd Arial Photo
2880 Howe Rd, Martinez, CA

±16,885 Sq. Ft. of beautiful, bright R&D space. Warehouse and office space. Two roll up doors. Find Out More

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Good News for West Oakland

West Oakland is slowly overcoming negativity. Its proximity to the economic activity in Emeryville, Oakland, and San Francisco have given rise to its popularity. The West Oakland BART station is only 10 minutes from the Embarcadero Station in San Francisco’s bustling financial district. This allows West Oakland to be “closer to downtown San Francisco” than many parts of San Francisco itself.

One of the downsides for the residents of West Oakland has been [Read more…]

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2014 World Series & Real Estate Investing

Madison Bumgarner pitcher.

Madison Bumgarner “MadBum” 2014 World Series MVP

As you may have heard, the San Francisco Giants won the 2014 World Series in a thrilling Game 7 defeating the Kansas City Royals. What is interesting about the win is that it was built upon skillful pitching and base hits. The Giants did not hit any home runs in Game 7 and had only one double in the deciding game.

What does this have to do with real estate?

Base Hits Matter

The Giants won because they were able to get base hits. They were able to get men on base and put them into scoring position. Base hits allowed the runners to slowly advance around the bases and eventually get to home plate to score runs.

In real estate everyone likes to go for the big score. The home run deal that serves up 10%, 15%, or more in return.

However, sometimes it is the smaller deals, the singles and doubles that end up winning the game.

It is the small portfolio of single family homes acquired over 20-30 years that provide the income and wealth that transfer on to the next generation. It is the small acquisitions made with discipline and prudence that provide for the life and retirement you have only imagined.

A Lifetime of Singles

I met an investor who was purchasing his 8th house. I asked him about it. He said, “It took me a lifetime to accomplish it.” And yet, his 8th property acquired in a good area is worth in excess of $400,000. If all of his properties are worth about the same, he has a portfolio of close to $3,200,000. That isn’t too shabby for a lifetime of work.

To have saved $3,200,000 via the stock market he would have needed to deposit $13,260 per year earning an average of 12% per year over a 30 year time period. If that represents 10% of his savings, he would have needed to average an income of $132,600 over that 30 years.

Ready to get started in real estate? Give me a call at 925.385.8798.

Photo Credit: DSC_4813 by wong1982428 used by creative commons license

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Update on Concord Naval Weapons Station

Concord Reuse Plan

Layout of the Concord Reuse plan as adopted in February 2010

The Contra Costa Times has an update on the Concord Naval Weapons Station.

In January of 2014 the City of Concord requested a statement of qualification from interested master developers for the massive project in March. They received eight responses and had the responses reviewed by a third-party firm to score the responses. It appears that they have now narrowed the list down to four developers.

The developers are interested in the prospect of developing the weapons station. The proximity to the North Concord/Martinez BART station allows them to build low-density, single-family housing that has access to mass transit.

For more information on the Naval Weapons Reuse Project you can head over to their website www.concordreuseproject.org. To see plans of the proposed development you can view this pdf.

Company Profile

Welcome to Maclennan Investment Group, Inc., your East Bay Area real estate investment advisors. Maclennan Investment Group assists buyers and sellers of real estate maximize the investment potential of their real estate assets.

Learn More about us.
Offering real estate services in the communities of: Walnut Creek, Concord, Pleasant Hill, Martinez, Alamo, Lafayette, and surrounding cities.

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925.385.8798

Maclennan Investment Group, Inc.
3380 Vincent Rd, Ste HUB
Pleasant Hill, CA 94523
p. (925) 385-8798
Licensed Broker in the State of California, DRE#01871809
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