Frederick County posted $275 million worth of commercial real estate sales during 2013 versus a little over $190 million in 2012—a healthy 40% increase in dollar volume.
In addition, the number of CRE sales transactions increased by over 10% from 2012. While two years is hardly enough data to begin tracking trends, it is encouraging to see sales growth in the short term heading in the right direction—up!
Commercial closings dropped off a bit during the second half of 2013. Not entirely unexpected, considering our local economy had to dodge sequestration, the fiscal cliff and the rollout of Obamacare.
On the leasing side, prices appear to have hit bottom, as concessions such as free rent and rent freezes are beginning to go away, and business owners are downsizing or subleasing shadow spaces. Frederick’s office segment is still limping along, as vacancies left by the loss of several large employers continues to put pressure on lease rates.
Anecdotally, the beginning of 2014 is off to a bright start. We hope the market has reached a tipping point, as we are now seeing more deals consummate than fizzle. Sellers overall are adapting to a more realistic view of commercial real estate values; buyers are entering the market as commercial credit markets open up again. And much like housing, commercial real estate inventories are quite low in the Frederick area.
Assuming current demand holds—or better yet, improves—conditions are ripe for commercial real estate prices and lease rates to begin a climb up, at long last.
Now is a great time to get off the fence if you’ve been waiting for the market to turn around. Let MacRo help you determine the best pricing and marketing strategy for your assets.
*Data used for this article and graph was gathered from Frederick County tax and land records. The information is deemed to be accurate, although MacRo has not independently verified it and does not guarantee that it is correct.