Strong Comeback for Commercial Real Estate

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It’s back!  Business is cranking again and the phone is ringing.  CoStar news reports that the dollar volume of commercial real estate transactions are back up to historical long term average and that’s with a lousy third quarter 2011, due mostly to the debt limit impasse  That’s a total of $291.6 billion last year, which is an increase of 32% over 2010.   The 2011 number also beat the 12 year average by $40 billion.  It’s still lower than the record, and I might add, unsustainable $560.7 billion in 2007.

Every sector has improved.  Office was up 39%, retail up 43%, apartments up 46%, hospitality up 32% and industrial lagged a bit at an 8% increase.  Land sales were down 14% versus 2010

Retail was up 43% from 2010, but that’s only 25% the 2007 volume.   Plus, it’s only the triple net or absolute net leased, single tenant, national credit retail that’s recovered so well.  It would be more of a recovery if we had some product, but due to unavailability of construction financing, there was little new construction over the last three years.  It’s a feeding frenzy on what’s out there that meets very finite criteria.

If you want this type of net leased, single tenant, retail product, be prepared to move when you find something you like.  If you like it, generally, so will everyone else.

I must get prepared for a city council meeting this evening so I’ll wrap this up and turn it over to Mark Heschmeyer for more detail

CoStar News – Article – Back in Business – Commercial Real Estate Sales Volumes Make Strong Comeback