Asking Rates Stabilized in June, Suggesting ‘Return To Normalcy’

The average asking price per square foot across all asset classes was stable in June, suggesting market growth will continue a consistent growth trajectory, according to new data from Crexi.

The average asking price in June was down 1.52% over May numbers, though asking prices varied across asset classes. Rates for industrial clocked in at $134.24 per square foot, a 5.93% increase, while land prices registered at $222.03, a 29.25% uptick.  Office asking rates were up 5.17% nationally, for an average of $211.90 per square foot. Meanwhile, multifamily rates were down 6.7% (but are still up 22.9% year-over-year) and retail was down a relatively modest 1.63%.

Overall, “an increase in unpriced listings and the activation of many smaller units likely account for most of the decline,” the Crexi report notes. “The slight shift, following a few months of minimal change, indicates that the market is settling into a return to normalcy.”

Average overall occupancy declined 1.89% month-over-month, and occupancy averages are 8.33% below year-over-year levels.  And asking rents are also stable month-over-month, suggesting a “steady ramp up towards recovery” by the second half of 2021.

In the office sector, the increase in asking rates was accompanied by a glut of new space that was brought to market. The amount of available flex space increased 20.8% in the month, while creative space increased by 36.7% and executive office space increased 24%.

“The simultaneous rise in office space values and steadiness of asking rates points to a promising spurt of activity in offices, particularly as corporate tenants finalize and implement their return to work plans,” Crexi notes.

And from a regional perspective, the South and Midwest were standouts, with Houston, Dallas, Atlanta, and Omaha leading buyer search activity on Crexi’s property database. Conversely, coastal cities like Los Angeles, New York, and Miami saw either tepid increases or outright declines in searches.