NAR's commercial market in July 2020 offers insights into the development of the commercial real estate market during the coronavirus pandemic. The commercial property rights market performed relatively well and was one of the preferred asset classes of investors as it was not as negatively impacted by the coronavirus pandemic as others. The industrial market was crucial throughout the coronavirus pandemic as it was underlined by the acceleration of e-commerce growth as consumer habits favored online shopping in terms of physical limitations.
The volume of commercial property rights decreased compared to April, but has continued to increase since the beginning of the year
Commercial real estate revenue of $ 2.5 million or more decreased 70% year over year to $ 2.1 billion in May. Commercial real estate sales transactions dropped significantly from 680 transactions in May 2019 to 165 in May 2020, and also represents a decrease from April 2020. The average per square foot has fallen 5% since February to $ 95 in May, an increase of 6 % compared to the previous year. The cap rates remain essentially unchanged at 6.2%.
<img src = "data: image / svg + xml; utf8,"data-src =" https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-industrial-sales-dollar-volume-bar-chart-07-15-2020- 1011w-484h.png? Itok = zsSYLjCl "class =" b-lazy "width =" 1011 "height =" 484 "alt =" Bar chart: dollar volume of industrial sales "title =" Bar chart: dollar volume of industrial sales "/>
E-commerce growth accelerated
E-commerce, which has already increased compared to the previous year, recorded a further increase in the first quarter. E-commerce grossed $ 160.333 billion in the first quarter, which marked the start of the COVID-19 pandemic. This represents an increase of 2.4% over the fourth quarter of 2019. Total retail sales for the first quarter of 2020 were estimated at $ 1,363.5 billion, a decrease of 1.3% over the fourth quarter of 2019. The E -Commerce sales in the first quarter of 2020 represented 11.8% of total retail sales in the US.
The shift towards e-commerce could be permanent as May's economic data shows how the number of off-store retailers has increased during the coronavirus pandemic. In the industries of the non-retail subsector, sales rose during the pandemic.
<img src = "data: image / svg + xml; utf8,"data-src =" https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-quarterly-ecommerce-retail-sales-as-percent-of-total-sales- since-q1-2019-liniengraph-07-15-2020-1018w-508h.png? itok = OGH6fxeg "class =" b-lazy "width =" 1018 "height =" 508 "alt =" line chart: quarterly e-commerce retail sales as a percentage of total sales since the first quarter of 2019 "title =" line chart: quarterly e- Commerce retail sales as a percentage of total sales since Q1 2019 "/>
The industrial labor market continues its downward trend
Although the industrial labor market is one of the strongest asset classes during the coronavirus pandemic, it continued its downward trend in May. Transportation and storage employment was down 28,300, or 0.55%, from April's estimates, which fell dramatically from the previous month.
Although employment in the transport and storage sectors fell slightly compared to the previous month and the numbers are below the level of the beginning of this year, it has performed well compared to other sectors.
<img src = "data: image / svg + xml; utf8,"data-src =" https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-transportation-and-warehousing-employees-sa-thousands-line-graph-07- 15-2020-1018w-456h.png? Itok = NxEHg3az "class =" b-lazy "width =" 1018 "height =" 456 "alt =" Line diagram: Transport and warehouse workers SA thousands "title =" Line diagram: Transport and warehouse workers SA thousands "/>
Industrial CMBS loan default rates are falling
The reduction in economic activity for most of March through May results in lower revenue and cash flow income from business assets. The industrial sector was the only sector that lowered crime rates among all types of commercial property. According to Trepp, the industrial crime rate fell 25 basis points from 1.82% in May to 1.57% and is the lowest and only decrease in basis points compared to the previous month by commercial property type. The industrial crime rate in June 2020 is down 37 basis points from the previous year.
<img src = "data: image / svg + xml; utf8,"data-src =" https://www.nar.realtor/sites/default/files/styles/inline_paragraph_image/public/economists-outlook-cmbs-delinquency-rate-by-property-type-bar-chart-07- 15-2020-1022w-538h.png? Itok = 3bkXPnzM "class =" b-lazy "width =" 1022 "height =" 538 "alt =" Bar chart: CMBS crime rate by property type "title =" Bar chart: CMBS failure rate by property type "/>