Welcome to the November 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 November, 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.
Overall average asking price per square foot increased slightly , while other November metrics remained unchanged.
Despite overall market uncertainty and changing economic conditions, the average asking price per square foot on Crexi rose 2.13% month-over-month. This movement represents the third consecutive month of pricing gains since August 2022 and a 12.5% increase year-over-year for all new properties.
In the same period, overall occupancy rates held at 84% of space filled (the same as in October), indicating tenant resilience in the face of uncertain economic shifts. Too, the proportion of unpriced listings remained unchanged (at 12.6% of new listings). This indicates seller confidence in asset valuations and the likelihood of attracting committed buyers with earlier pricing discovery.
Multifamily pricing gains were a primary growth driver, while other asset types posted little movement.
New multifamily properties for sale posted a 10% increase compared to October’s average asking price per square foot. Ahead of economic shifts, multifamily attractiveness as a revenue-producing asset – proven essential pandemic – coupled with rising home ownership costs is becoming all the more apparent.
Multifamily growth was the primary driver of last month’s pricing gains, as other asset classes posted little movement. Retail and industrial assets grew approximately 1.2% and 1%, respectively, while office assets registered a slight valuation decrease of 1.7%.
Average asking rents for new leasing space posted declines compared to October.
On Crexi, new for-lease properties posted a 4.6% drop in asking rate per square foot month-over-month. In the same period, we observed a significant increase in the number of new spaces made available for lease compared to October’s new listings. This lift in inventory, coupled with rate decreases, indicates that landlords need to become more competitive to attract tenant interest and ink contracts.
Many businesses placed temporary halts on business/brick-and-mortar expansion, shifting to defensive strategies or pausing overall to evaluate economic changes headed into the new year. As such, property owners responded by positioning themselves as more viable in a shifting market, offering new tenants more advantageous rent terms and other concessions to get deals signed.
Retail and restaurant assets saw significantly lower asking lease rates, likely to compete with fewer actively searching tenants.
Retail and restaurant space for lease were the primary drivers of decreasing rents on Crexi. Respectively, the asset classes posted an 11.3% and 8.7% drop in average asking rent per square foot, compared to the previous month. These represent significant drops compared to the promising growth both asset types experienced in the tail-end of the pandemic, as both benefited from a surge of foot traffic and consumer spending.
Ahead of recession rumors, many businesses are clamping down on essential needs and not inking new leases, leading to a significant drop in asking rents by landlords to stay competitive and attract tenants. However, opportunistic tenants with capital can take advantage of these discounts to lock in long-term leases in desirable spaces.
Chicago and Atlanta attracted more buyers in November, while Omaha and Los Angeles experienced tenant activity increases.
Chicago and Atlanta were two larger cities that experienced a notable gain in investor activity on Crexi, up 6.4% and 4.8%, respectively, compared to the previous month. On the leasing side, Omaha was the third-most searched city for overall new leases, while Los Angeles and Las Vegas experienced slight gains (less than 2%) in tenant interest.
Highest Average Asking Price per Square Foot By MSA — November 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.