Crexi National Commercial Real Estate Report: May 2024

Overall National Sales Trends

What the Data Says

• On Crexi, we observed the average asking price per square foot increase by 3.76% across Crexi’s marketplace in May, corresponding with a slight cap rate compression, which decreased by 22 basis points from 6.82% to 6.6%. Overall occupancy also rose by almost 3%, which is a positive sign for landlords’ prospective NOI.

Asset Type Trends

• There was positive growth across asset classes from April to May, with the exception of industrial. 
• Retail continues to perform impressively, with a 7.33% month-over-month average asking price increase, hitting its highest new listing price point ever on Crexi in May 2024.
• New office properties are also faring surprisingly well, growing by 4.41% month-over-month and seeing cap rates compress to nearly 6%, which are record lows for the last few years given office’s challenges. Additionally, average office occupancy slightly increased from 60.8% in April to 62% in May.

Key Takeaways

• Positive job reports are hinting at a tailwind for office leasing, especially in high-density markets with newer construction. According to Placer.ai, office visits have increased year-over-year, with office foot traffic in May 2024 rising by 8.6%, primarily driven by newer, amenity-rich office facilities.
• Multifamily average pricing on Crexi has experienced two consecutive months of growth, compensating for the moderate corrections in the first quarter. Despite persistent inflation and high interest rates, multifamily housing is well-positioned to serve as a more affordable alternative for individuals who would otherwise enter the housing market.

Overall National Leasing Trends

What the Data Says

• Average leasing rates reversed their April behavior by rising almost 2% in May, with approximately the same total of new assets hitting the market as in the first month of Q2.

Asset Type Trends

• Industrial assets were the standout leaders in asking rate gains last month, with leasing rates increasing by over 7.6% from April averages.
• Office assets showed the second-highest increase in leasing rates, driven by high-class buildings with amenities that attract tenants. In contrast, retail and restaurant leases remained relatively stagnant.
• Retail rates have remained more or less the same throughout the first half of the year, averaging about $14.95 per square foot annually.

Key Takeaways

• The rising popularity of e-commerce has boosted demand for industrial and warehouse space throughout the U.S. in recent years. In response, supply surged, leading to a record number of warehouse completions entering the market over the past few years. However, even as asking rates had stabilized earlier in the year, industrial’s asking rate gains look on track to pick up as more space is absorbed and comes off the market.
• One factor impacting the retail sector is a diminishing supply and an overall stagnancy in development projects. The costs of lumber and labor costs, in addition to high-rate financing, prevents some retail development from penciling out, which advantages landlords as rent growth rises. However, tenants only have so much flexibility amid current macroeconomic factors, so ongoing conversations are still needed, which is pushing back overall deal completion timelines.

Regional Breakdown

What the Data Says

• Overall, property seekers searched much more actively on Crexi in May, with Houston, Miami, and Chicago in the top three spots, respectively, as Crexi’s most-searched markets last month. In the same period, Houston searches in particular rose by 17.1%, Miami gained 20.8% more buyer attention, and Los Angeles saw an impressive 43.4% jump.
• On the leasing side, tenants were more muted in their search activity, with Houston, Chicago, and Los Angeles remaining the most active markets two months in a row. Atlanta was a standout market for tenants, with search activity rising 2.2% in May compared to April metrics.

Highest Asking Price by MSA — May 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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