Posted on: January 25th, 2013 by admin@cpp
The commercial real estate pricing situation showed continued positive signs in November, which may signal that the Atlanta commercial real estate market is strengthening.
There was a gain of 0.9 percent in the value-weighted U.S. Composite Index during November, according to the Commercial Real Repeat Sale Indices report from CoStar Group. The gain helped this index improve more than 6 percent in the past 12 months. It also further increased to nearly 40 percent higher than the cyclical bottom, which was recorded in 2010. More investor demand for top-level properties in the largest markets around the country helped improve this figure in recent months.
The equal-weighted index improved 1.1 percent in November, the report explained. This was due to the general commercial real estate market experiencing notable strengthened conditions over the 12-month period. The low point for this aspect of the indices was in the early part of 2011, and it improved 10 percent?since that point.
While many investors showed interest in the most prized properties in the most expensive markets in recent months, there is a growing interest in lesser markets, the report noted. There was an overall slowdown in market investment during the third quarter, which may influence the strong finish to the year for commercial real estate purchases. This includes not only the industrial market, but also the office and retail sectors.
Improvement on all fronts in a relatively even manner may suggest that investor activity is relatively balanced. There was a spike in leasing activity during November, and this could have a positive effect on overall growth, the report explained. Fewer than 15 percent of all transactions during the month were considered distressed, which may further support that leasing conditions are better than in the past. This was the lowest recorded figure in more than three years.
Commercial development may rise in 2013
While leasing and purchasing conditions are improving, the total level of commercial real estate development may also see gains this year. Nonresidential construction should improve by more than 5 percent in 2013, according to a report from Associated Builders and Contractors. This could help commercial construction specifically, as it may rise 10 percent during that time. Much of this may have to do with a spike in nonresidential construction employment, which could improve more than 2 percent.
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