Crexi National Commercial Real Estate Report: October 2022

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Welcome to the October 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 October, 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.

October 2022 Monthly Trends by Type on Crexi
Average Asking Price per Square Foot and Changes Month-over-Month

Little valuation movement occurred in October, though more sellers felt confident listing a price tag.

Overall average asking prices rose a slight 1.2% in October on a monthly measurement, with valuations holding steady amid two rate changes in as many months. While not outright growth, this pricing steadiness becomes more encouraging with the added context of unpriced listings’ behavior on Crexi. The total number of unpriced listings shrunk to only 12% of new inventory, compared to more than 15% in September. 

Steady valuations and fewer unpriced listings indicate improved seller confidence as we head towards the end of 2022, especially as buyers were more motivated to complete 1031 exchanges and took first-mover’s advantage before subsequent Fed rate increases. 

Industrial maintained status as an asset class with the highest pricing growth in October, plus a new inventory glut.

Industrial enjoyed its second consecutive month as the leader in pricing gains, with average asking prices ballooning 7.2% compared to September. This continued streak of hot-ticket success is even more apparent in year-over-year metrics, with numbers indicating a 21.3% pricing growth since last year. 

We also observed a lot of new industrial inventory in the market in October, with nearly a 39.6% increase in warehouses for sale and 23.3% more distribution hubs coming online. The continual reshoring of U.S. businesses and ecommerce’s steady rise – particularly ahead of the holiday season – work together with long-term fundamentals to maintain industrial’s desirability as an investment asset, particularly in the face of economic uncertainty. 

Multifamily and retail showed slight corrections but celebrated occupancy wins.

Multifamily and retail both showed signs of slight correction in October, but not overly so. The average asking price per square foot dropped 1% and 3.4%, respectively, yet these asset classes maintain their 1st and 2nd place spot as the highest asking prices overall on Crexi. 

A promising sign: retail posted significant improvements in occupancy on a month-over-month and annual basis, breaking over 90% in October for the first time since June 2020. Occupiers are capturing and maintaining space to meet improved consumer demand. While prices fluctuated to stay competitive, we observed a much rosier picture of retail’s longevity than last year’s, particularly in experiential retail. 

On the multifamily side, we saw a slight decrease in occupancy month-over-month, hitting an average 84.2%. However, we saw over a 100% increase in single-family rental portfolios come online in October, with new deliveries explaining the hit to occupancy averages. These rental homes fill consumer needs for more space t without the cost of a mortgage. We’ll likely see occupants consistently flock to this space.

Restaurants were the standout for-lease asset, with double-digit asking rent growth.

Average asking rents per square foot overall fell a slight 2.2% in October, representing the second month in a row of slight corrections. We saw decreases in all asset classes except for retail, specifically restaurants. Retail rents held steady, further evidence of the sector’s return, but restaurants, in particular, jumped a promising 14.7% in asking rents in October. This jump points to experiential retail’s return, as consumers prioritize being out in the world even in the face of inflation.

Coastal cities attracted buyer and tenant demand, with Midwest transportation hubs receiving growing interest.

The search activity that Houston commanded last month fell slightly, giving way to a surge in October interest in Los Angeles, New York, and central commerce hubs such as Omaha and Chicago. On the leasing side, tenants showed a significant 11.4% increase in activity around New York City properties, signaling continued revitalization, and taking advantage of opportunities in the city. Charlotte also moved up to the #4 spot, behind only Houston, Los Angeles, and Miami regarding tenant demand.

Highest Average Asking Price per Square Foot By MSA — October 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

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