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The commercial real estate market is recovering but remains weak compared to pre-COVID-19 pandemic conditions, according to NAR commercial members who responded to the quarterly commercial real estate market survey of the first quarter of 2021 and industry data.
Acquisitions for large commercial properties – properties or portfolios of $ 2.5 million or more – declined 28% year over year in the first quarter of 2021, with transactions declining in all property types except hotel acquisitions. Investors could buy hotels to use for other purposes like apartment buildings.
Transactions declined an average of 1% among NAR's commercial members who participated in the quarterly market survey and whose acquisitions were typically properties or portfolios of less than $ 2.5 million. Respondents reported an increase in land and industrial property sales and a decrease in sales of other types of commercial property.
Commercial property prices continue to firm up, but commercial property value is still 6% lower than last year.
A majority of commercial NAR members who responded to the first quarter 2021 commercial survey (70%) said businesses move into a lease or small office space because of their work from home.
