Prices, sales of commercial properties down in U.S.
Wednesday, October 15, 2008
Source: inRich
inRich reports: Office and retail spaces, like residential properties, are declining in value.
Earlier this year, potential buyers of commercial properties did not offer as much money as sellers hoped to get, said Robert M. White Jr., founder and president of Real Capital Analytics of New York, which tracks commercial real estate capital markets globally.
"There was a big disconnect. . . . Sellers were not accepting discounts. There were not many distressed sales, but that is changing rapidly," White said.
In all, 3 percent of closed transactions today are distressed sales, he said.
Last year, 120 cities worldwide -- including the Richmond area -- saw more than $1 billion in commercial property acquisitions.
"Maybe only 20 will make it to the $1 billion mark this year," White said. He did not cite Richmond as one of the cities.
Even so, Richmond -- as a capital city experiencing population growth in the surrounding areas -- is well-positioned, White said.
The most severe and prolonged price corrections are likely to occur in areas that saw the sharpest increases, such as Florida, Arizona, Southern California and Nevada.
Prices nationwide for commercial properties have fallen 12 percent from their peak, and the number of sales is down 70 percent in the U.S. this year, he said.
The greatest challenge nationwide is in retail, as consumer spending falters, White said.
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Posted by: Nina Turner