2022 Fourth Quarter Market Report

Commercial sales are exceeding expectations.

“To place this era of unprecedented sales in historical context, the graph…shows South Coast sales volume has followed a stair-stepping growth pattern with three distinct phases, starting with the “great recession” 15 years ago. The recessionary phase lasted through 2011
and was followed by a seven-year stretch averaging $315 million of non-hotel volume. 2022 was the fourth year of a phase averaging $491 million. The primary engine driving the market into higher gear has been the growing influx of capital from individual, corporate, and even
large-scale institutional investors seeking commercial real estate in the South Coast market.”

Some Q4 highlights:

  • Commercial sales generated record volume for the second consecutive year; however, higher
    interest rates will slow sales momentum in 2023.
  • Apartment sales brought record-high dollar volume and record-low cap rates, though greater
    pricing friction due to interest rates is expected this year.
  • Offices offered for sublease doubled as tech tenants adapt to remote work. Traditional office
    vacancy is more stable, and achieved rents are as high as ever.
  • Retail rents continue to appreciate as vacancy tightens everywhere except State Street. Local
    restaurants and retailers are driving the market.
  • Robust industrial leasing activity brought vacancy
    to 1.7% and generated record consideration of $52 million, while pushing rents to new highs.

For your copy of Hayes Commercial Group’s Market Report or to discuss your portfolio planning for 2023, email liam@hayescommercial.com

Author: Liam Murphy

Liam Murphy is a partner at Hayes Commercial Real Estate and supports many national clients in their commercial real estate needs. He holds the distinguished Certified Commercial Investment Member (CCIM) designation as a recognized expert in the disciplines of commercial and investment real estate. Less than 6 percent of the commercial real estate practitioners nationwide have earned the CCIM designation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s