Welcome to the August 2023 release of our Crexi Trends report. We analyze Crexi’s database each month to identify relevant activity and patterns to share key insights with our users.
Our report showcases trends across Crexi’s commercial property listings in August, evaluating average price per square foot, search behavior, occupancy, and other noteworthy metrics. With this information, we aim 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
- In August, average asking prices dropped a slight 1.3%, posting their first downward movement since May 2023. Unpriced listings were down in the same period, constituting only 9.5% of total assets added last month.
- Occupancy rates rose to an average of 80.8% for new listings for the first time since November 2022, marking a significantly promising recapture of space in the CRE sector.
- The number of new listings rose 6.3%, and August’s new inventory also represented the second-highest ever total added on Crexi’s platform in a month.
Asset Type Trends
- The industrial sector recovered much of the loss from July, with pricing up 17.5% to hit $168.45. The sector saw some drop in occupancy in the same period, lowering to 66.88% on average in August, from 68.6% in July and 77.32% year-over-year.
- Office pricing continued its snail’s pace climb, up by less than 1%, continuing its positive streak from July—however, a jump to a 70.7% occupancy average spells promising news for the sector. After months of high vacancies and general headwinds, this is the highest occupancy we’ve observed in offices on Crexi since August 2020.
- Retail’s asking prices rose 3.2% from July, with 85.6% average occupancy.
- Hospitality assets (representing fewer listings overall on Crexi than other asset classes) also enjoyed a noticeable jump in pricing, up 36.56% from the previous month.
Key Takeaways
- Industrial remains a darling of the commercial real estate industry, as demand is unlikely to shrink soon. However, the arrival of many construction deliveries and a longer acquisition timeline has brought many buildings on the market with fewer existing tenants than in previous periods. The driving asking price suggests bullishness on the capacity to fill such space, with macroeconomic factors more responsible for slowing trades.
- Office’s pricing steadiness and rising occupancy suggest we may finally be turning a corner, seeing a payoff on back-to-office initiatives and an increasing steadiness in suburban office properties. Valuations in CBDs are still low and represent much of the moving capital in the sector, but secondary and tertiary office markets are seeing a more-quick return to the mean.
Overall National Leasing Trends
What the Data Says
- Overall average asking rates in August rose again by 2.9%, hitting the highest rate so far in 2023 and continuing a two-month growth streak.
- In the same period, we observed a significant rise in new listings added to our lease platform, with 19.8% more spaces for lease added compared to inventory added in July.
Asset Type Trends
- Industrial asking rates rose by 1.46%, representing slowed growth from last month’s impressive jump alongside a sizable (27.9%) increase in new inventory.
- Office asking rates budged little but also had to contend with more competition as the site saw an 18% increase in office inventory compared to July additions.
- Retail had the most wins among for-lease asset types, with average asking rents up 4.1% monthly, hitting the sector’s highest-ever average rates per month in Crexi’s history. Conversely, restaurants barely budged in leasing rates.
Key Takeaways
- Retail’s emergence as a solid post-pandemic sector has come to fruition in today’s market, with pricing and asking rates steadily gaining, despite the economic headwinds facing CRE as a whole. Whether retail loses its luster as other sectors overcome their hurdles will remain to be seen. Still, the sector’s fundamentals and consistent ROI have painted it as a clear choice for acquisition while other transactions stall.
- Industrial’s rise in available inventory makes sense, given the decrease in average occupancy shown in new for-sale industrial listings reported above. The sector has yet to settle; subleasing has gained traction in many markets as vacancies increase. However, long-term upsides remain strong, with just a few hurdles to face before supply tightens again.
Regional Breakdown
What the Data Says
- Regarding unique search activity, Houston, Chicago, and Dallas claimed the top three spots for actively seeking buyers, with activity up 3%, 5.7%, and 1.5%. Houston, Los Angeles, and Atlanta were the top destinations for active tenants, up 14.4%, 8.5%, and 10.6%, respectively.
- Generally speaking, potential tenants were far more active than buyers on Crexi, with the top ten cities experiencing search growth between 10-30% month-over-month.
- Charlotte saw the most growth on the leasing side of the platform, with searches surging 28.2% compared to July. Philadelphia was the big winner on the sales side, with 11.2% more activity month-over-month.
Highest Asking Price by MSA — August 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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