Crexi National Commercial Real Estate Report: February 2024

Overall National Sales Trends

What the Data Says

• Overall, new listings on Crexi’s marketplace experienced a slight dip in asking prices in February, lowering approximately 2.7% following January’s more impressive surge in valuations. However, the average asking price per square foot is still higher than it’s been since June 2022.
• Occupancy metrics posted less growth than the previous month but were still on an upward trajectory, hitting their highest average since September 2022 across all asset classes, at an average of 79.86%.

Asset Type Trends

• Office pricing experienced a healthy February. Driven by larger square footage, likely in more sprawling, amenity-rich Class A buildings, office pricing was up 7.2% month over month, the most growth across asset classes.
• The retail sector experienced the most noticeable dip in average asking prices per square foot last month – down 5.4% compared to January – but its numbers still represented record-breaking high valuations on Crexi. In the same period, occupancy averages continued to climb for the sector, passing 85% for the first time since October 2022.
• Following January’s impressive double-digit pricing gains, multifamily experienced some corrections in February, with pricing down 2.2% monthly.

Key Takeaways

• Many multifamily units have recently been delivered to the sector, dampening increased prices with a surplus of supply. However, these buildings are anticipated to become quickly filled, especially in high-growth markets, as long as mortgage rates remain elevated as they currently are, around 7%.
• Retail remains a stronghold in commercial real estate investing but has experienced a slight slowdown in the first two months of 2024. However, the scarcity of new space continues to drive demand in the sector, especially with few construction deliveries anticipated in the next year.

Overall National Leasing Trends

What the Data Says

• Average annual leasing rates per square foot continue to show minimal movement on Crexi, rising less than 0.3% from January to $14.43 per square foot.
• In the same period, we observed a 20% increase in new for-rent inventory hitting Crexi’s platform, with thousands of new office and retail listings driving most of this growth.

Asset Type Trends

• Similarly to the for-sale side of Crexi, offices for lease experienced the highest rate of growth month-over-month, with average asking rates up 2% and continuing modest gains from January’s numbers.
• Conversely, retail and restaurant assets saw asking rates drop 2.5% and 3.9%, respectively, despite less available square footage on average for new listings.

Key Takeaways

• Much of the office sector’s rent gains were driven by the arrival of Class A assets to the platform, which did a much better job of attracting tenant demand than Class B and C counterparts. While many tenants are still wrestling with concrete return-to-work strategies, companies are continuing to use amenity-rich space as a draw to attract top talent and encourage collaborative serendipity for which in-person work allows.
  
• Industrial continues to showcase relatively static leasing rates, kept afloat by pre-leased demand even though many construction deliveries hit the market over the previous two quarters. Considering the high costs of demand, we expect to see rates increase as industrial space is observed and becomes more scarce.

Highest Asking Price by MSA — February 2024

Disclaimer: This article's information is based on Crexi's internal marketplace data and additional external sources. While asking price in many ways reflects market conditions, variations in pricing are affected by changes in inventory, asset size, etc. Nothing contained on this website is intended to be construed as investing advice. Any reference to an investment's past or potential performance should not be construed as a recommendation or guarantee towards a specific outcome.

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