Healthier Retail numbers abound across the country and we on the Monterey Bay are no exception. Two of our healthiest retail neighborhoods here on the Monterey Peninsula are Ocean Avenue in beautiful Carmel-by-the-Sea and on world-famous Cannery Row in Monterey. There are no vacancies on either of these strips and the tenants are successfully embracing monthly rental rates that range from $6-12 per square foot (this number is for the high foot traffic corridors of Ocean and Cannery Row themselves...arteries see rates from $3-5 per square foot). As I meet with a regional retailer to negotiate a prime location lease on Cannery Row this Wednesday, I am heartened to hear that the confidence in retail sales is solidified further by Microsoft's proposed lease on Fifth Avenue in NYC at the former Fendi Shop...at $229 per square foot ($2,749 annualized). We continue to move forward! Here's the WSJ article: Microsoft on 5th Ave
Monday, September 29, 2014
Sunday, September 28, 2014
Wednesday begins the 4th Quarter and 2014 should end on a fairly positive note for most commercial property owners and investors. As of mid-year, according to the National Association of REALTORS: 2014.Q2 Survey Highlights 64% of commercial REALTORS® closed a sale. Sales volume rose 7% from a year ago. Sales prices increased 3% year-over-year. Cap rates averaged 8.3% during Q2.14 Leasing volume advanced 4% from previous quarter. Leasing rates increased 3% over previous quarter. Concession levels declined 5% on a quarterly basis. Inventory shortage topped the list of current challenges, followed by a tie between pricing gap and local economies. The estimated average transaction stayed level at $1.4 million in Q2.14. In Monterey County, our stats paralleled the national trend, with Leasing volumes and rates increasing and sales prices rising. The increases in sales prices are due to the trend here on the Central Coast that mimics the rest of the country regarding a tight, tight inventory. The very low inventory has resulted in cap rates a point or two below the national average of 8.3. Luckily, with a good commercial agent, a buyer is sometimes able to discover pocket (unlisted) listings that may yield better cap rates. More specific data regarding highlights on the Coast in upcoming posts.