Commercial Real Estate Sales – getting any better?
I am asked this question at least several times a week from businesses, tenants, building owners and just about anyone I run into who is involved with real estate. While the residential markets are popping off the charts with multiple offers in many areas, the CRE side seems to be slow to the party.
In the Industrial sector there have been some positive gains, mainly in tenant occupancy. In the greater Chicagoland market, vacancy is down to 8.6% through the 1st Qtr of 2014, compared to 9% in 1Q13 and 11% 1Q12. Lake Zurich Industrial park has a very low vacancy, while I don’t have the exact number I would submit a number lower than the 8.6%, as we are actively looking for additional spaces for current buyers and tenants.
As for sales, Costar shows just 17 sale transactions in the Lake County market through the 1Q with prices ranging up to $6M. Price per square foot averages are at $54/sf vs $36/sf compared to this time last year.
The addition of the SBA 504 and 7A programs have been a godsend to many buyers with just 10% down, attractive rates and 20+ year terms, make buying in many cases more attractive than leasing. We work with several outstanding lenders so for more information on these programs let us know.
In general we see an uptick of activity from interested buyers, so we look for a gradual increase in the number of LOI’s and contracts being written through the end of the year. Just last week we saw 3 new LOI’s submitted on a couple of our listings, so maybe our party is finally getting started. What do you see, anything positive or negative in your marketplace?