CRE Sales Pricing Recovery Coming to Your Market?

Uptick to CRE Sales?

According to Randyl Drummer, in a CoStar Group article, “sales of U.S. commercial real estate reached nearly $64 billion in 2012, jumping 22% from the previous year to the highest annual total since 2004”.  These signs of recovery in CRE pricing also extended past the apartment market, spreading into office, industrial and retail property, however; what really stands out is the pricing gains in apartments.  Drummer wrote, “The multifamily property index advanced by 11.2% in 2012, with the 10 markets in the prime multifamily index again hitting pre-recession peak pricing well ahead of the other major property types”.  This shows that many consumers are still apprehensive about purchasing a home, so they are choosing to rent for now.  This is excellent news for the CRE construction industry, because demand for apartments is outpacing supply, so there is money to be made in building apartment complexes at the present time.  There is even further proof of this, because, according to Drummer, “developers delivered double the number of new multifamily units in 2012 than in the previous year, and construction in 2013 is on pace to bring an [even] bigger increase”.  Even though retail investors remain cautious, commercial, retail and hospitality are showing positive growth, which point to an increase in consumer confidence in the market overall.