commercial real estate market survey - july
TRANSCRIPT
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 1/14
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 2/14
JULY 2013
Download this report from:
www.realtor.org/reports/commercial-real-estate-market-survey
Copyright © 2013 NATIONAL ASSOCIATION OF REALTORS®. Reproduction, reprinting or retransmission
in any form is prohibited without written permission. For questions regarding this matter please e-mail
THE NATIONAL ASSOCIATION OF REALTORS®, “The Voice for Real Estate,” is America’s largest tradeassociation, representing 1.0 million members involved in all aspects of the residential and commercial real
estate industries..
Although the information presented in this survey has been obtained from reliable sources, NAR does notguarantee its accuracy, and such information may be incomplete. This report is for information purposes
only.
The REALTORS® Commercial Real Estate Market Survey measures quarterly activity in the commercial
real estate markets. The survey collects data* from commercial REALTORS®. The survey is designed
to provide an overview of market performance, sales and rental transactions, along with current
economic challenges and future expectations.
2NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 3/14
2013.Q2 Survey Highlights
• REALTOR® commercial markets posted noticeable improvements in sales and leasing
conditions.
• Sixty percent of commercial REALTORS® closed a sales transaction during the quarter.
• Sales volume rose 12.0 percent from a year ago. • Sales prices increased 2.0 percent on a year -over-year basis.
• Cap rates averaged 8.7 percent during the second quarter
• Leasing activity advanced 5.0 percent from the previous quarter.
• Rental rates increased 2.0 percent compared with the previous quarter. • Concession levels declined 4.0 percent on a quarterly basis. • Financing remains at the top of the current challenges list, followed closely by the pricinggap between buyers and sellers, and tight inventory.
• The estimated average transaction slid from $1.1 million to $1.0 million from the prior quarter.
3
REALTORS ® Commercial Activity – 2013.Q2
Sales Volume Compared with Previous Quarter Up 11%
Sales Volume Compared with Previous Year Up 12%
Sales Prices Compared with Previous Quarter Up 1%
Sales Prices Compared with Previous Year Up 2%
Expected Inventory Availability for the Next 12 Months Up 2%
Rental Volume Compared with Previous Quarter Up 5%
Rental Rates Compared with Previous Quarter Up 2%
Level of Rent Concessions Compared with Previous Quarter Down 4%
Volume of New Construction Compared with Previous Quarter Up 4%
Direction of Business Opportunities Compared with Previous Quarter Up 6%
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 4/14
4
2013.Q2 Cap Rates
Office 8.3%
Industrial 8.2%
Retail 8.5%
Multifamily 7.5%
Hotel 8.8%
Development 10.7%
2013.Q2 Vacancy Rates
Office 16.9%
Industrial 15.2%
Retail 14.6%
Multifamily 5.7%
Hotel 20.6%
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
60%
40%
Sales transaction
Yes
No
1%
2%
6%
16%
19%
20%
36%
Over $10 M
Between $5 M and $10 M
$2 M and $5 M
Between $1 M and $2 M
Between $500K and $1 M
Between $250K and $500K
Under $250K
Dollar amount of last transaction
0% 20% 40% 60% 80% 100%
13.Q2
13.Q1
REALTORS ® Most Pressing Challenges
Inventory
DistressFinancing
Local Economy
National Economy
Pricing Gap: Buyers vs Selle
Other
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 5/14
5NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
3.Q2
3.Q1
Average Rental Space Demanded During Last Transaction
Over 100,000 sq ft
50,000 - 100,000 sq
10,000 - 49,999 sq f
7,500 - 9,999 sq ft
5,000 - 7,499 sq ft
2,500 - 4,999 sq ft
Under 2,500 sq ft
%
%
%
%
%
%
%
%
%
0 - 12 months 12 months 24 months 36 months 48 months 60 + months 60 months
Average lease term during last transaction
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 6/14
6NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 7/14
7NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 8/14
8NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 9/14
9NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 10/14
10NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 11/14
The REALTORS® Commercial Real Estate Quarterly Market Survey asks participants to comment on
current conditions in their markets. Below are a few of the comments about the latest quarter environmen
[…] Biggest challenges for majority of my clients is both avail. properties and financing
Active but tough - Lender issues limit financeable properties
Activity is up for sales and leasing.
Almost all sales are cash and multiple offers for residential building sites
Because of the Cline Shale Oil, there has been extremely high Market conditions compared to a year ago
Despite positive press coverage, tenants, landlords, buyers & sellers are cautious. Many are waiting it out, i.e. economy to
show definite signs of strength. Especially true for local and regional businesses...
Economy has not recovered at all rents for commercial properties cant sustain businesses or there potential growth.
Energy sector is providing "fresh" capital to the area. New capital flows are improving the market in real estate.
Evergreen is a unique commercial market but it does appear to be much slower than a quarter ago.
Existing business on the market for sale should partner space with new businesses starting up. The rental payment for thespace will assist owners with the overhead costs. Win/Win!
Fewer large players. Lot more mom & pop deals under $500k. Larger users still sitting on the sidelines, watching the Fed &
scared of Obamacare and who knows what shoe drops next…Investors all flocking to multi-family.
Financing. Down payment and working capital required by the lenders 50 - 60%.
I am seeing appreciating sales prices that I perceive as being too fast and too high to be sustainable.
I have two office and 1 Industrial listings all for sale both in the 2000 SF range and little to no action.
If market sales/leasing continue at current rates, our small resort market will be out of supply in a year.
Improving.
Industrial space seems to be leasing up with no new starts unless it's a build-to-suit, office is still dragging along at a very
slow pace, lots of inventory
Interest in general commercial leasing is picking up. Tenants looking for deals for the future.
It is virtually impossible to finance any land deals. Only thing moving is owner occupied with SBA financing.
11NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 12/14
The REALTORS® Commercial Real Estate Quarterly Market Survey Comments—continued.
12
Lack of direction in national economy; Fear; uncertainty is the enemy of investment
Lack of trust in the economy, government and Obamacare is stifling sales and leases.
Leasing is 70% of our deals and office is 60% of that. Things are looking up, activity is great.
Many unqualified buyers wanting to purchase and tenants requiring more than they can afford.
Market seems to be on upward trend with outlook of economy. Still some uncertainties to deal.
Need new product and there is no financing available for spec development
New Orleans metro has typically been countercyclical to the national economy. Post Katrina effects are dwindling and our
occupancy across the board, office, retail, and industrial is stable with no new product speculated or sitting idle . Adaptive
re-use of functionally obsolete product has taken place but only with tax credits and incentives.
Office leasing sluggish Little multifamily inventory.
Our market is down because we are in a drought, and our lake is almost gone. This is affecting our market the most.
Our market is growing
Our market is small/medium. vacancy is reasonably high. Regional Banks have abdicated responsibility for lending to smal
business. Other than medical uses we have not seen any commercial vacant land development for 4 years. SBA have been
heavily involved in lending and have saved a number of deals.
Our market seems to be gathering steam with new tenants looking in the office market. Industrial vacancies are still very
high with values on for sale industrial properties very good. Student Apartment market seems overbuilt due to a rush to
build new units over the past 2 years. It will be interesting to see how plays out.
Overall activity level is dramatically greater than a year ago and significantly better than just a month or a quarter ago
which will lead to more transactions.
Recovery continues to be steady but slow
Rental space slowly absorbing at stable flat rents about 25% to 30% below peak
Rents are down, inventory up, activity good
Retail and Industrial markets still flat
SBA remains the best financing option
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 13/14
The REALTORS® Commercial Real Estate Quarterly Market Survey Comments—continued.
13
Small market with minimal commercial activity over the past six months. Several For Sale or For Lease by Owner propertie
that are not hitting the MLS data base.
Small market, limited buyer-tenant demand diminishes liquidity.
The commercial market is very hot in land development and in buildings sold. Developers are running out of lots and it wil
be a 12 to 18 month turn around on infrastructure and developing of lots.
The energy sector drives demand in this market and has absorbed most of the available space.
The local market cap is 6% but my clients pass up our market to capture 7-8% COC available in the national market. Here,
people pay to stay because of it's beauty somewhat like Aspen.
The market for commercial listings has picked up.
The market has definitely gotten better due to financing available and sellers willing to sell and investors are looking for
solid assets
The market here is slowly improving. Small towns are the last to feel a crunch and the last to recover
The market in general didn't change. More media games and news, then actual change. Lack of reasonable, but easy financing makes it difficult. Also an artificial holding of properties by the banks not helping to create real movement. All is
superficial activity and good for short term, but will not keep for long (over 1-1.5year). Nowadays changes are more
speculations then real stimulus. After a year or so I think it will go down again. Thanks.
The market still has a very limited supply of product and no measurable new construction has happened in almost 6 years
The rush for large parcels of land for housing and new construction is on!
This market has been driven recently primarily by government related growth., i.e low income housing, university related
growth, multi-family as well as some retail.
West Texas is continuing to flourish as far as Real Estate Investments & Financial Growth go out here.
Word has it Michigan is turning around after 40 yrs of decline.
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
JULY 2013
NOTE: In July 2013, NAR invited a random sample of 41,075 REALTORS® with an interest in commercial
real estate to fill an on-line survey. A total of 277 responses were received, for an overall response rate of
0.7 percent.
7/27/2019 Commercial Real Estate Market Survey - July
http://slidepdf.com/reader/full/commercial-real-estate-market-survey-july 14/14
NATIONAL ASSOCIATION OF REALTORS ® RESEARCH DIVISION
The Research Division of the NATIONAL ASSOCIATION
of REALTORS® produces the Commercial Real Estate
Outlook, a quarterly report forecasting commercial marke
fundamentals. The Research Division also issues the
annual Commercial Member Profile, detailing the busines
and demographic characteristics of commercial members
Additionally, NAR Research examines how changes in th
economy affect the commercial real estate business, and
evaluates regulatory and legislative policy proposals for
their impact on REALTORS®, their clients and America’sproperty owners.
If you have questions or comments regarding this report
any other commercial real estate research, contactGeorge Ratiu, Manager, Quantitative & Commercial
Research, at [email protected].
To find out about other CRE research products:
14
500 New Jersey Avenue, NW • Washington, DC 20001 – 2020
800.874.6500 • www.REALTOR.org
JULY 2013
www.facebook.com/narresearchgrou
twitter.com/#!/NAR_Resear
REALTOR.org/research-and-statistic
economistsoutlook.blogs.realtor.o