May 2, 2022

Asking Prices Rose in March Across CRE Sectors

Asking prices across CRE sectors ticked up in March for those properties listed on Crexi’s database, with the average asking price per square foot rising 2.72% month-over-month.

Cap rates compressed by 0.14% over the same period across asset classes, while occupancy rates picked up a 1% gain. New inventory also increased by 19.7% in March over February numbers, while office and retail assets showed “promising gains” in prices and tenant occupancy.

“Among the asset types most heavily impacted by the pandemic, office and retail saw promising signs of prosperity in March,” Crexi analysts wrote in a report dissecting the March data. Office assets increased by 6% month-over-month, with occupancy increasing 2% in the same period. And “shopping and other retail subcategories are back in full swing, with owners confident enough in their properties’ values to begin listing them on the market,” with retail assets posting a 1.9% increase in average asking prices and hitting 90% average occupancy for new listings.

Crexi also noted a 27% gain in shopping center inventory in March over February numbers. Asher Wenig, Northmarq Senior Vice President, previously told GlobeSt that shopping centers “are making a great comeback,” with increased demand from institutional and private investors as retailers continue to announce expansion plans and consumers flock back to physical retail.

Multifamily also saw a slight pricing correction on Crexi’s database last month, with the average asking price dropping 4.24%. The firm observed a large number of smaller multifamily parcels hit the market with less available square footage. But despite the pricing drops, sellers seem as confident in their multifamily property values as ever, with a noticeable reduction in unpriced listings,” Crexi notes.

Overall asking lease rates on Crexi also showed their third consecutive month of decline, down 1.89% from February for all asset types. But special purpose properties like RV parks, self storage and historic buildings saw a nearly 7% gain month-over-month.

Houston also remained the most-searched metro on Crexi by both prospective buyers and tenants, followed by Dallas and Miami. Los Angeles showed the most gains in search volume last month, up 13.1% over February numbers.