Overall Asking Prices for CRE Assets Hit Record Increase in Q2

The CRE markets showed growth and stability throughout the second quarter, with overall asking prices hitting record highs and posting 6.46% increases over Q1 and 27% overall gains. 

New data from Crexi shows that average occupancy on its platform grew by 3.05% in Q2, and despite some fluctuation month-to-month this growth is still indicative of a steady climb back to pre-pandemic levels. Fewer assets entered the market in Q2 than in Q1, prompting some analysts to draw comparisons to the end-of-year lull often observed at year’s end. But “despite the decrease in new assets, buyer activity surged to all-time highs,” according to Crexi.

Overall property-seeking actions on Crexi’s platform increased 17% over Q1 and more than 89% year-over-year, and buyers performed 17.4% more buy actions in the quarter. That’s 88.8% more than Q2 2020. And buy actions per user—which shows how active a property seeker is—have gone up steadily since January of this year, signaling renewed buyer confidence. 

Tampa, Orange County, and Austin were the most popular destinations for CRe property seekers using Crexi’s platform, and Dallas and Houston were also top market movers, with the majority of closed Q2 deals. 

On the landlord side, the average asking rate per month per square foot jumped 3.25% over Q1 figures, hitting a post-pandemic high.

“Leasing’s overall growth was slowed by a significant drop in May, though a sharp decrease in new inventory likely influenced this, as did a simultaneous surge in average square footage from assets added in April,” the Crexi report notes. “This drop is likely due to a slight decline in sublease space availability, which was responsible for the surging inventory we observed in Q1 2021.”

Tenant searches also grew by 7.86% over the previous quarter, a pace that was slower than previous quarters. This suggests a slight slowdown in tenant searches as occupiers adjust to a post-COVID world, according to Crexi.  Retail tenant activity was up 16.3%, office tenant activity was up 10%, and industrial tenant activity increased 0.5%

“Interestingly, the slower clip of tenant searches coincides with increased activity per tenant seeker, up 20% from this time last year,” the report notes. “This could suggest that even though tenants are pausing some searches, those on the market are more active in their hunt for space and feel more pressure to close a deal.”