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7/27/2019 2013 Q3 Survey Highlights
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OCTOBER 2013
Download this report from:www.realtor.org/reports/commercial-real-estate-market-survey
THE NATIONAL ASSOCIATION OF REALTORS®, “The Voice for Real Estate,” is America’s largest tradeassociation, representing 1.0 million members involved in all aspects of the residential and commercial real
estate industries..
Although the information presented in this survey has been obtained from reliable sources, NAR does not
guarantee its accuracy, and such information may be incomplete. This report is for information purposes
only.
Copyright © 2013 NATIONAL ASSOCIATION OF REALTORS®. Reproduction, reprinting or retransmission
in any form is prohibited without written permission. For questions regarding this matter please e-mail
eresearch@realtors.org.
The REALTORS® Commercial Real Estate Market Survey measures quarterly activity in the commercial
real estate markets. The survey collects data* from commercial REALTORS®. The survey is designed
to provide an overview of market performance, sales and rental transactions, along with current
economic challenges and future expectations.
2NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
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REALTORS ® Commercial Activity – 2013.Q3
Sales Volume Compared with Previous Quarter Up 3%
Sales Volume Compared with Previous Year Up 11%
Sales Prices Compared with Previous Quarter Down 0.2%
Sales Prices Compared with Previous Year Up 4%
Expected Inventory Availability for the Next 12 Months Up 1%
Rental Volume Compared with Previous Quarter Up 2%
Rental Rates Compared with Previous Quarter Up 1%
Level of Rent Concessions Compared with Previous Quarter Down 2%
Volume of New Construction Compared with Previous Quarter Up 5%
Direction of Business Opportunities Compared with Previous Quarter Up 4%
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
NOTE: In October 2013, NAR invited a random sample of 47,446 REALTORS® with an interest in
commercial real estate to fill an on-line survey. A total of 376 responses were received, for an overall
response rate of 0.8 percent.
2013.Q3 Survey Highlights
• REALTOR® commercial markets maintained momentum in sales and leasing activity.
• Sixty-four percent of commercial REALTORS® closed a sales transaction.
• Sales volume rose 11 percent from a year ago. • Sales prices increased 4 percent on a year -over-year basis.
• Cap rates averaged 9.2 percent during the third quarter
• Leasing activity advanced 2 percent from the previous quarter. • Rental rates increased 1.0 percent compared with the previous quarter.
• Concession levels declined 2.0 percent on a quarterly basis. • Financing tied with pricing gap at the top of current challenges list, followed by shortage oinventory.
• The estimated average transaction rose from $1.0 million to $1.3 million from the prior quarter.
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4NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
64%
36%
Sales transaction
YesNo
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5NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
3%
2%
6%
14%
20%
23%
32%
Over $10 M
tween $5 M and $10 M
$2 M and $5 M
etween $1 M and $2 M
tween $500K and $1 M
ween $250K and $500K
Under $250K
Dollar amount of last transaction
2013.Q3 Cap Rates
ffice 8.7%
ndustrial 9.0%
etail 8.7%
ultifamily 7.9%
otel 9.3%
evelopment 11.3%
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6NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
2013.Q3 Vacancy Rates
Office 17.8
Industrial 15.1
Retail 15.7
Multifamily 7.3Hotel 19.4
0%
5%10%
15%
20%
25%
30%
35%
40%
Average lease term during lasttransaction
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7NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
2013.Q3 2013.Q2
Average Rental Space Demanded During
Last Transaction
Under 2,500 sq ft
2,500 - 4,999 sq ft
5,000 - 7,499 sq ft
7,500 - 9,999 sq ft
10,000 - 49,999 sq
ft
50,000 - 100,000
sq ft
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8NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
State-level data may register large fluctuations from one period to the next due to small sample sizes in some states.
Blank values may be due to missing data or a state-level sample size smaller than 5.
0% 20% 40% 60% 80% 100%
13.Q3
13.Q2
REALTORS ® Most Pressing Challenges
Inventory
Distress
Financing
Local Economy
National Economy
Pricing Gap: Buyers vs Selle
Other
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The REALTORS® Commercial Real Estate Quarterly Market Survey asks participants to comment on
current conditions in their markets. Below are a few of the comments about the latest quarter environmen
2013 is becoming a Great Year for Real Estate
Activity in nearby counties increasing and will increase here at a later date....we always follow the non-rural trends.
Activity is increasing but there is still too much space for sale and for lease. Almost every shopping center and office buildi
has vacancies now.
Although financing remains a big challenge; shortage of solid, quality inventory makes the real estate market, as a whole,
tough.
Awaiting economic recovery and higher employment numbers
Banks continue to be the major problem in my business. Lack of financing and major down payments required from Lende
Because of the lack of inventory, owner/sellers are not as willing to give concessions.
Busy and transactions take 90 to 120 days
Clients are unsure of insurance requirements so they are hesitant about expanding the space or number of employees.
Commercial Properties I have listed for sale are stagnant . Most interested persons are wanting to lease not buy. Sellers ar
unreasonable and don't want to lower prices.
Current demand levels will not improve until consumer discretionary incomes improve.
Currently working on direct sale over 1 million
Downwards turn in progress
Existing space leasing up. New space not being developed except for owner-occupants
Far East Contra Costa County is the ugly step child of the greater Bay Area. We weren't hit as hard as the central valley, bu
our Commercial Market has a long way to go. We need to see a stronger economy before businesses will be brave enough
expand their hiring, and then their real estate budget. The residential has certainly had a good year, I am hoping we will se
some of the same enthusiasm for Commercial Real Estate in the next 9 to 12 months.
Financial questions and direction caused by Federal and State make it more difficult to make longer term decisions
Financing continues to be the weak part of real estate transactions. Money is available IF one can qualify for the jumps
through hoops and with more levels of approvals, Completely ridiculous
9NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
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The REALTORS® Commercial Real Estate Quarterly Market Survey Comments—continued.
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Frustrating, financing scarcity for commercial
I do some investment sales, but mainly office leasing in Metro Atlanta. In-town real estate is vibrant; suburban markets st
suffering. The effects of weak economy plus new health care law has put a damper on deal volume for leasing.
In our area we have a lot of vacant buildings, and no work.
Investors are looking for very good cap rates but do not have deep pockets. Very low inventory for investors in the 1-3 Mil
Range. Doing residential as a result.
It appears to be fictional. Great underlying instability.
It has been no fun being in the real estate business for the past 6 years.
It just takes more effort and persistence to accomplish something compared you the previous 2-3 years.
Leasing has improved considerably, but there is still a reluctance to purchase because of uncertainties in the market and
governmental regulations.
Lending is tough, Businesses are too worried about Obamacare and National Outlook, lost 2 deals because of it
Many are "must to "moves. Clients seem to be in waiting mode. Some, but not much, new business
Market dropping but becoming more stable as oil boom stabilized
Market heating up significantly.
Market is much stronger.
Market is sluggish with some improvement
Market is still in flux, with no increase in market conditions.
Market looks to be headed in the right direction. Should continue if legislators start to work together.
Market north and south of us has rebounded better than we have !
Market strength is noted throughout several different sectors, driven by rooftops and international trade. However, a
dichotomy still exists where the prime markets are doing exceedingly well, secondary markets are mixed, but tertiary
markets are still struggling to find a foothold in terms of stabilized rent rolls and investment demand.
More traction and sense that it is coming back; confidence level is much higher!
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
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The REALTORS® Commercial Real Estate Quarterly Market Survey Comments—continued.
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Most buyers come from our client base that we are moving from rental tenant to property owners with SBA loans, problem
is that demand is high and inventories low. A lot of all cash buyers make it difficult for buyers getting a loan
Most of our commercial business is in land. We work in timberland and ag land. You should include this category in your
next survey.
My business is 75% agricultural and 25% commercial bare ground with an occasional commercial building referral. I have
closed over 50 million in the past 3.75 years, 16.5 million ytd.
My commercial is down from last year…mainly because settlements are taking longer
New banking laws are reducing number of lenders that are willing to make commercial and multifamily loans.
New Orleans is unique!! we haven’t had a new multi tenant office building since 1989 in the downtown market and 1986 i
the suburbs!! recycled product!!
Northern Colorado industrial going very well the rest of the market is still stagnant. Little construction activity going on.
Noteworthy apartment building activity in Ft. Lauderdale CBD
Now that the REIT's and Equity Funds have purchased the majority of real estate in bulk we are now seeing moreowner/users ready to buy.
Our economy is moving forward due to the petrochemical boom and good business practices from state government
People are very nervous about the health care costs and unknowns as well as the entire running of the government.
Financing is still very difficult.
Picking up steam... slowly but surely.
Pockets of activity, slow but upward trending, dependent on jobs, jobs aren't picking up.
Political indecisiveness has caused a pause in confidence, thus slowing what appeared to be the beginnings of a good roll.
Political machinations cause uncertainty
Retail strip centers construction is up and Industrial inventory is tight.
Sellers are unrealistic about value of property. Buyers are lowballing.
St Louis Metro Employment has been detrimental in drawing buyers outside this area
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
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The REALTORS® Commercial Real Estate Quarterly Market Survey Comments—continued.
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Steady but slow climb. Local markets being skewed by national AP news
Texas market is very active. Finding a deal is the hardest.
The Activity is picking up. Our office numbers are better than the last three years. The market is starting firm up and price
appear to be getting to a place where they can start moving up.
The economy is killing the retail real estate market for leasing and buying
The local and national economy continue to challenge New Mexico.
The local market is hampered by a state government that is not hospitable to businesses. We are net exporters of
businesses.
There are some retail still under construction but hotels and apartments have already been constructed and people are
moving from their RV's into apartments or hotel rooms and into houses.
This is an "L" bottom with no end in sight...thank you to BIG BIZ
This year is better than last year which was better than the previous year so the trend is up and getting better. Landlords
are trying their best to increase rental rates while seller of quality real estate compress cap rates.
Tight market across the Board!
Transactions are taking substantially longer to get completed. Financing for purchases and landlord's requirements for
tenant financial strength has become more of an issue. i.e. Financing is harder to come by and landlord's are requiring
stronger tenants.
Very sluggish and flat market, few buyers and tenants, few non-distress sellers
Very strong land market
Very volatile. Up/down like a yo-yo depending on what the Gov. does.
We are a small to medium diverse market, not influenced by large metropolitan areas. less than 1 milli0n population over 3
counties and close to 50% of commercial listings are vacant land.
We have had better commercial sales in vineyards and Hotel. a number of new businesses have opened in the county. The
higher interest rates have not helped and the office vacancy rate is still high.
Would think market would be strong.....lack of supply, but also lack of buyers & tenants. market is still uncertain......lack o
confidence.
NATIONAL ASSOCIATION of REALTORS® | RESEARCH DIVISION | www.realtors.org/research
OCTOBER 2013
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NATIONAL ASSOCIATION OF REALTORS ® RESEARCH DIVISION
The Research Division of the NATIONAL ASSOCIATION
of REALTORS® produces the Commercial Real Estate
Outlook, a quarterly report forecasting commercial marke
fundamentals. The Research Division also issues the
annual Commercial Member Profile, detailing the busines
and demographic characteristics of commercial members
Additionally, NAR Research examines how changes in th
economy affect the commercial real estate business, and
evaluates regulatory and legislative policy proposals for
their impact on REALTORS®, their clients and America’sproperty owners.
If you have questions or comments regarding this report
any other commercial real estate research, contactGeorge Ratiu, Director, Quantitative & Commercial
Research, at gratiu@realtors.org.
To find out about other CRE research products:
13
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OCTOBER 2013
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