Crexi National Commercial Real Estate Report: May 2023

Welcome to the May 2023 release of our Crexi Trends report. Each month, we analyze Crexi’s database to identify relevant activity and patterns to share key insights with our users. 

Our report showcases trends found across Crexi’s commercial property listings in May, evaluating average price per square foot, search behavior, occupancy, and other noteworthy metrics. With this information in hand, we hope to arm principals, tenants, and brokers alike with actionable learnings to make well-informed commercial real estate decisions.

Overall National Sales Trends

What the Data Says

• Asking prices for listings added in May posted a very small decrease – 0.4% – from April numbers, which represented a third consecutive month of miniscule downward pricing movement. 
• Occupancy rates showed little change from April averages, holding steady at approximately 80% market-wide for new assets added last month.
• While the ratio of unpriced listings moved slightly down in May – indicating improved pricing confidence – we observed a 12.6% jump in the number of new listings hitting our platform compared to April.

Asset Type Trends

Average Asking Price per Square Foot and Changes Month-over-Month

• Industrial was the most-impacted asset class in May, with asking prices dropping nearly 8%, while occupancy averages lowered by 2.7% in the same period.
• Both multifamily and office assets saw average asking prices drop slightly in May. But while multifamily occupancy dropped 2.5%, new offices showed a small gain in overall occupancy by 1.4%.
• Retail asking prices gained a promising 2.8% in asking prices from April numbers. In the same period, occupancy increased by 2.4%, and 14.5% more retail assets hit Crexi’s platform.

Key Takeaways

• While overall asking prices haven’t posted gains in the last quarter, they are holding steady in the face of overall market headwinds and uncertainty heading into H2. As sellers add considerable supply to the market, we may observe demand’s leverage rise accordingly, particularly as underwriting practices tighten and interest rates continue impacting deal flow.
• Industrial’s asking prices dropped, but leasing rates held steady in the same period, indicating continued occupier demand despite vacancy shifts, recession fears, and an uncertain economy’s impact on consumer spending.
• Retail is continuing its quiet streak of success as landlords gain a bit more pricing power to access good tenants on the expansion track. While prices still aren’t what they were, down 9.1% year-over-year, the sector’s fundamentals are luring more cautious investors from other asset classes.

Overall National Leasing Trends

What the Data Says

• Lease rates climbed slightly by 1.1%, sharply tapering off the more significant 27.3% jump in April from a surge in high-rent retail assets. 
• We also observed a noticeable decrease in assets added to our leasing platform, down 27% compared to the previous month. However, this inventory offered significantly more SF per listing, with an average of 28.4% more available space.

Asset Type Trends

• Industrial asking rates hardly budged in May, with a comparable amounts of inventory added to the platform.
• Office rents showed modest gains in May, with a 2.6% increase heading off two consecutive months of falling asking rates.
• Coming off a month of high growth in April, retail for-lease asking rates held steady month-over-month. This number represents the highest leasing rates for retail have been since October 2022, and only a 0.8% decrease year-over-year.

Key Takeaways

• While May didn’t reveal much rent growth on Crexi, it maintained the significant climb in rates posted in April while landlords added fewer assets to the site, indicating continued, high demand for leasing space.
• Office and restaurant assets (up 2.36%) each posted modest gains that were responsible for the overall lease sector’s rent growth. While office space is generally still in hot water in city centers, certain buildings in secondary and tertiary markets are still driving modest increases in the sector,

Regional Breakdown

What the Data Says

• Searches by specific cities were up across the board on the sales and leasing sides of Crexi’s platform.
• Houston took the top spot in both sales and for lease, with searches specifying the city up by 4.6% and 6.8%, respectively. Los Angeles took second in both categories, posting 18.5% more search activity than in April. While Dallas was third on the sales side, up 9.2% in searches, Miami took the bronze spot on the leasing side, albeit with little changes in activity compared to April. 

Highest Asking Price by MSA — May 2023

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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