IS THE THIRD QUARTER OF 2019 A GOOD ONE?
The National Association of Realtor's 2019 Q3 Commercial Real Estate Market Trends and Outlook is here and things are looking up!
In both large and small commercial markets, commercial prices continued to ratchet up as of 2019 Q2, with price gains from one year ago, based on price indices reported by the National Council of Real Estate Investment Fiduciaries (8%), Federal Reserve Board (4%), and Green Street Advisors Price Index (2%).
According to the report there is a positive outlook for Multi-family and Industrial Assets.
Multi-family and industrial will continue to be strong commercial asset classes. The multi-family market is expected to remain bright in metros with low vacancy rates and affordable rents. E-commerce will continue to sustain demand for industrial properties, particularly flex properties. Retail brick and mortar will continue to do well in growing metros and in retail niches that require face-to-face customer service. The office market will be sustained by the growth in technology-driven jobs. The Opportunity Zone tax break on capital gains is expected to bolster commercial and residential real estate sales in 2019-2020.
Some of the itemized opportunities and challenges are as follows:
Commercial Market Opportunities
Affordable housing/, including ADUs and micro-apartments
Expanding small logistics
Rehabilitation /renovation of Class B/C buildings
Build-to-suit for technology companies
Re-purposing vacant retail spaces
Pedestrian and increased use of biking
Growth in house of worships, medical, dental, food services
New businesses, job growth, high population growth
Opportunity Zones to increase ROI
Commercial Market Challenges
High land, material, and labor cost
Low inventory/scarcity constraining sales and leasing
The National Association of REALTORS® is America’s largest trade association, representing more than 1.3 million members, including NAR’s institutes, societies and councils, involved in all aspects of the real estate industry.
NAR’s Quarterly Market Survey gathers information about the commercial transactions of REALTORS® and members of affiliate organizations (CCIM, SIOR, RLI, IREM, and the Counselors of Real Estate) and the opportunities and challenges facing commercial practitioners.
The 2019 Q3 survey was sent to approximately 69,000 commercial REALTORS® and members of affiliate organizations during October 1–9, 2019, of which 817 responded to the survey.
Among sales agents who had a sale during 2019 Q3, the median total transactions value for the quarter was $1.4 million and the median sales (closed) transactions was 2. Of the 244 respondents who answered the question about designations held by the respondent, 30% reported holding designations from an affiliated society, institute, or council.
About the writer: Shaura Cuyan writes about all the hottest Real Estate trends and predictions for Summit VA Solutions! She has previously written for a number of freelancing gigs and writes her own blog on lifestyle and current issues. She is a Graduate of Bachelor of Arts in Communication, taking up her Masters in Development Communication.