Crexi National Commercial Real Estate Report: June 2022

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Welcome to the June 2022 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 June, 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.

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

Overall asking price averages see positive gains in June with smaller-sized assets.

Last month, the average asking price per square foot for new listings on Crexi rose more than 7% . These gains represent a promising resurgence in valuations after a relatively stagnant May, indicating continued growth in the sector amid inflation and interest rate concerns. The industry has surpassed its post-pandemic

In the same period, we observed a slight decrease in the average size of new parcels – listings a lost 2,800 square feet of available space on average, which likely also contributed to the pricing gains. These changes were primarily driven by a sharp decrease in the average industrial asset and multifamily building size, down 9K+ and 6K+ square feet, respectively. 

Industrial and multifamily led the valuation charge with proven ROI amid rising rates.

Industrial and multifamily proved to be the most valuable players during the pandemic, and in the uncertainty of current market shifts, investors are returning in droves and driving up valuations. Industrial property for sale experienced a 10% pricing increase month-over-month; a positive move after experiencing slight compression in May. 

Industrial’s edge isn’t going away anytime soon, mainly thanks to supply constraints and a slow and steady construction delivery timeline. We saw zero increase in the percentage of new manufacturing facilities hit the market compared to May and observed only an 11% increase in new warehouse inventory.

Multifamily was the top mover in pricing gains in June. As interest rates continue to rise, and the cost of home ownership is a higher barrier to entry, buyers anticipate an increasing demand for multifamily living in turn, driving up prices. The asset class experienced an average 15.3% gain in valuations compared to the previous month, which saw the slightest drop in asking price.

Leasing rates stagnated in June with little movement.

Last month, we observed little change in asking rates overall on the leasing side of Crexi’s market. The only asset classes that experienced rate growth were industrial (up 2.5%) and restaurants (1.8%), related to increased consumer spending on goods and social experiences in a post-pandemic summertime. As the weather warms, we’ll see whether this asset valuation will continue amid inflation’s impact on consumer spending.

Buyers continued to place less emphasis on specific markets vs. asset types, with searches by city declining in most MSAs.

Overall, searches for properties for sale and spaces for lease saw fewer buyers and tenants looking for properties in specific cities. Notable search activity gains were Detroit and Columbus, which saw increases of 8.7% and 3%, respectively, in June. Many heavy-hitting markets such as Houston and Miami saw decreases in buyer attention, but Dallas held steady with less than a percentage point difference in activity.

On the leasing side, we saw more tenant attention directed towards Phoenix and Sioux Falls, which experienced an 8% and 9% increase in search activity compared to the previous month. New York City also gained an increased share of tenant attention, with search activity rising 11.6% since May.

Highest Average Asking Price per Square Foot By MSA — June 2022

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
Crexi Insights

Marketing Team at Crexi

Crexi makes CRE easy by consolidating the entire commercial real estate process into a single ecosystem.

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