Crexi National Commercial Real Estate Report: November 2023

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Welcome to the November 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 November, 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

  • The average asking price per square foot rose 1.79% for new assets month-over-month. For-sale properties on Crexi experienced a seventh month of pricing growth alongside a gradual compression of cap rates. 
  • Occupancy has also been trending up  overall in new listings: the last four months have experienced growth, with new listings reporting an 80.33% average occupancy in November.

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

  • Industrial and multifamily continued experiencing corrections last month. It was primarily due to construction over-deliveries, especially in markets with a surplus of supply and too-high rents pricing out renters in some major metros. 
  • Offices experienced a modest upward climb in November, representing three consecutive months of pricing gains. However, nationwide office occupancy didn’t change in the same period, remaining at a 64.5% average. 
  • Retail performed best last month, with four months straight of pricing gains under the sector’s belt. Average occupancy rates in the same period increased, hitting their highest levels since October 2022 at 85.96%.

Key Takeaways

  • Despite a slight pricing contraction, industrial is slightly more insulated than multifamily as companies prioritize onshoring, build-to-suit developments become more desirable, and last-mile deliveries become ever more crucial. 
  • Multifamily is experiencing some stress from overbuilding and too-high rents in fast-growth markets, but it will ultimately be okay in the long term. Would-be homeowners are still prioritizing renting due to rising mortgages, with equilibrium a long way off. While this is bad news for homebuyers, it’s good for apartment owners.
  • Retail remains a desirable asset and one of the fastest-growing on Crexi: the sector was inches away from hitting $400 per square foot in November, and we expect it to pass this milestone as businesses post holiday numbers and post-Black Friday shopping wins.

What the Data Says

  • On Crexi, we observed hardly any change in the overall leasing market from a rent perspective. Asking rents dipped less than 0.1% in November, representing a reassuring steadiness to contrast more volatile shifts in the last few months. 
  • We also observed a noticeable decrease in new leasing space available, reaching the lowest presentation of inventory in a new month since December 2021 – likely attributed to the holiday season’s lull. 

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

  • Industrial rents were unchanged in November, wrapping up some contraction from the previous months. Office asking rents were similarly stagnant, and both sectors saw less overall new inventory added. 
  • Restaurants’ average asking rents experienced a third consecutive month of contraction in November, despite similar average square footage being available for lease. 
  • Retail saw a second consecutive month of rent growth, though slower than October’s 7.8% jump. This represents a three-month high and a 9.64% rent rate increase compared to November 2022. 

Key Takeaways

  • Retail operators (and therefore rates) continue to perform well despite signs of disruption in other asset classes. The holiday season typically represents a temperature check of consumer spending habits, and consumer confidence seems strong as indexes for measuring confidence in income and job security rose last month.
  • Industrial continues to see the arrival of construction deliveries glutting some of the accelerated growth we observed in previous months. However, a healthy demand exists, especially as companies continue onshoring their manufacturing and retailers prioritize last-mile logistics facilities.

Regional Breakdown

What the Data Says

  • Generally, searches by city experienced some declines in November, most likely due to holiday-related inactivity. Of the cities that attracted increased buyer attention, Las Vegas (0.9%), Nashville (1.87%), and Cleveland (1.36%) saw the most growth compared to the previous month. 
  • Conversely, space-seeking tenants were more active over the Thanksgiving break. Leasing searches on Crexi saw a spread of movement across the board depending on the city. Houston, Dallas, and Orlando grew the most in terms of tenant search activity, posting 7-8.7% more searches month-over-month.
  • Houston, Chicago, and Dallas remained the top three most popularly searched metros on the sales side, while Houston, Los Angeles, and New York were the top three on the leasing side.

Highest Asking Price by MSA — November 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

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