Welcome to our November 2020 update of the Crexi Trends monthly report. In this month’s data feature, we scour Crexi’s database to unearth relevant data and pass along patterns and insights with an eye towards the future.
This report covers trends observed in property listings added to Crexi’s CRE marketplace in November, focusing on average prices per square foot, search activity, cap rates, and other notable metrics. We hope to equip investors, tenants, and brokers alike with actionable understandings to make well-informed commercial real estate decisions.
Average Asking Price per Square Foot and Changes Month-over-Month
Average occupancy rates continue to drop as pricier listings come online.
We’ve observed a continued decrease in average occupancy rates in new listings for sale in the last few months. In August, new properties for sale had average occupancy rates of 89%, not far off pre-COVID levels. This average has decreased every month since, hitting 79% on average in November.
Over the same period, we also observed a consistent increase in the asking price per square foot in new listings. These higher price, lower occupancy listings demonstrate the harsh reality faced by tenants with higher rents in higher-value locations that are more likely to vacate their current premises in times of trouble.
Holiday seasonality slowed the new listing rates for most subtypes, but not all.
On Crexi, the only property subtypes to avoid monthly drop-offs in new listings for sale were land for commercial and agricultural use. Commercial land listings were the most numerous to join the platform in November, with an 18.6% increase in new properties added from the previous month.
Commercial land, medical offices, and flex listings were the only subtypes with positive month-over-month changes on the leasing side, as well. Medical offices accounted for the largest surge in new listings, with an 8% increase from October, likely due to the rapid rise in COVID-19 cases and the need for ICU capacity to house impacted patients.
Restaurant leasing rates rose, while land rents became cheaper.
Asking lease rates for new restaurant properties listed in November saw a 6.88% increase from October averages as larger spaces came online. Conversely, land rates saw a significant drop of 19.86% in asking rents for newly listed assets.
For the most part, however, the three other main asset classes of office, industrial, and retail remained consistent month over month, with average asking rents showing little movement in either direction.
Searches for cold storage and co-working spaces are on the rise.
While most tenants are winding down their property searches in the holiday season, searches for cold storage and co-working spaces increased. Cold-storage rentals saw a 12.09% increase in leasing searches in November, outperforming other industrial subtypes such as warehouse and distribution.
While the connection is anecdotal, this rise in search activity around cold-storage facilities could indicate the rising need for facilities to store and transport freshly-approved COVID-19 vaccines, or – at least – buyers interested in getting ahead of the trend. Similarly, the surge in co-working searches somewhat indicates some tenants’ hopes to return to office life sooner rather than later.
Highest Average Asking Price per Square Foot By State — November 2020
Disclaimer: The information in this article is based on Crexi’s internal marketplace data and additional external sources. While asking price in many ways is a reflection of 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.