Crexi National Commercial Real Estate Report: December 2023

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Welcome to the December 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 December, 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.

What the Data Says

  • In December, average asking prices for new assets on Crexi dropped by 7.2%, posting their first downward movement since May 2023.
  • In the same period, we saw the lowest percentage of unpriced listings in 2023, with only 7.9% of new assets lacking a price tag.
Average Asking Price per Square Foot and Changes Month-over-Month

  • Industrial and land sectors experienced a sleepier month, with the sharp decreases in average pricing per SF attributed to the holiday season, over-delivery of new assets, and several smaller square-footage parcels coming along, affecting the mean.
  • Retail saw its first decrease in pricing in four months but continues to boast a healthy national average occupancy rate of 83%, up from an 81% average in December 2022.
  • Multifamily asking prices stayed steady following two consecutive months of falling averages. In the same period, multifamily’s average vacancy rate fell below its lowest levels in Crexi history, hitting 79.4% in December.

Key Takeaways

  • The overall decline in asking prices last month is likely attributed to property owners seeking to close a sale before the end of the 2023 tax year, adjusting prices and increasing pricing visibility to attract fast-acting buyers. Indeed, in the same period, we observed the lowest ratio of unpriced assets on our platform in 2023, with only 7.9% of new listings lacking a price tag.
  • Industrial continues to go through its normalization process, following mid-pandemic booms, as construction deliveries boost supply, interest rate hikes slow transaction velocity, and inflation eats through consumers’ discretionary income. However, 2024 is expected to deliver a return to some normalcy with COVID-era trends like e-commerce and fast last-mile delivery around to stay.
  • Multifamily rent growth has stalled somewhat, particularly in high-boomtowns that saw rapid population influx during the pandemic. Multifamily deliveries have slowed demand, especially as renters seek more affordable, older buildings. But high mortgage rates are still steering tenants towards renting and will continue to do so as home ownership costs climb.

What the Data Says

  • Average leasing rates moved only slightly between November and December, with new assets raising rents by approximately 1.2% month-over-month.
  • The holiday season saw fewer assets come online, with about 11% less new inventory than in November. Many landlords likely waited for the new year and potential market shifts to list their space.
Average Asking Rent per Square Foot and Changes Month-over-Month

  • Restaurant leasing rates were a big winner over the holidays, with average rents up 9.75% from the previous month.
  • While retail lease gains slowed, the sector continued to post modest increases in average asking rates. Office’s growth was about the same, recovering to its highest average asking rent since August 2023.
  • Industrial was the only sector to lower average asking rents, though the movement was comparatively marginal compared to previous periods. 

Key Takeaways

  • The industrial sector continues its tug of war between plentiful demand and over-deliveries allowing tenants to be a bit more choosy. Occupancy rates posted a promising gain in the same period — up to 70% for new assets in December — meaning that tenants continue actively capturing space despite more supply being available. 
  • Retail’s growth in December marks its third consecutive month of rent growth on Crexi and the second-highest asking rent for new assets in a given month since September 2022. While the sector’s gains are slow and steady from a tenant perspective, this resilience and consistency of returns are attracting more investors to the sector than other assets.

Regional Breakdown

What the Data Says

  • Houston, Chicago, and New York were the three most-searched metros in December by investors on Crexi. However, many top metros saw fewer search-related activities overall during the holiday season.
  • On the leasing side of Crexi’s platform, Houston, Los Angeles, and New York were ranked as the three most popular cities by tenant search activity in December.
  • Chicago posted a particularly impressive increase in search activity on our platform’s investor and tenant sides. The city garnered 12.3% more interest from investors in December than the previous month, while tenants were 14.3% more active during the same period.

Highest Asking Price by MSA — December 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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Crexi Insights

Marketing Team at Crexi

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