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2015 Q2 Commercial Real Estate Market Survey

In line with their mission to distribute comprehensive data to their members, strategists, media, and the consumers, the National Association of REALTORS® has released the results of a market survey covering the second quarterof 2015.

According to NAR president Chris Polychron and the association’s officers, the statistics gathered have been duly qualified, with the following results:

Sales

  • 60% of commercial REALTORS® closed a sale
  • 9% rise on sales volume from the Second Quarter of 2014
  • 7% increase on year-over-year sales prices, compared to the previous quarter’s 4% gain
  • Sales transaction values continue to rise, reaching $2 million from last quarter’s $1.7 million.

Investments

  • Investment sales for commercial real estate picked-up with a 6.4% quarterly increase and 9.1% hike from the second quarter of 2014.
  • The current market value of apartments sank its cap rate to 6.8%, lowest among all property types. Retail transactions have the highest comparative capitalization rate of 8%. Office and industrial spaces come close at 7.7% and 7.5% respectively. Hotels follow at 7.4%.
  • The general direction of business opportunities are looking at a positive 6.4% rise. The NAR predicts favorable circumstances in the Industrial, Retail, Construction, and Apartments/Multifamily areas.

Leases

  • 54% of commercial REALTORS® completed a lease transaction
  • 60% of the commercial market are still under 36-month to 60-month lease terms
  • An average gross lease volume of $629,000 was estimated during this quarter
  • On average, 84% of leased properties are 5,000 square-feet and below in size, same as last quarter’s

Others

  • The increase in employment opportunities caused no wage improvements, weakening confidence in the market
  • Delays in the building departments result in a lack of stability, which causes prices to go up
  • Some small towns are seeing plenty of startups and franchises

To find out about available commercial properties in Los Angeles, contact Leo Nordine at 310-379-880.