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The commercial property market is recovering, although commercial property transactions and the underlying market fundamentals are still weak compared to pre-pandemic conditions.
In the first quarter of 2021, commercial transactions were 28% below the level of the previous year. Commercial property prices continued to rise, but valuations are down 6% year over year.
In the first quarter, dollar volume declined from acquisitions of $ 2.5 million or more in the office (-36%), retail (-42%), industrial (-41%), and multi-family (-12%) markets. back. However, hotel acquisitions rose 13%. Investors could buy some hotels to use for other purposes, such as apartment buildings. NAR's recently published report on case studies of the conversion of vacant hotels / motels into apartment buildings documents such conversions based on information gathered from commercial NAR members and desk research.
NAR Research expects trade to pick up in the second half of 2021 and even stronger in 2022. The population will be virtually vaccinated by the end of summer 2021 as more businesses increase operating capacity, resume travel and workers return, office and consumers spend some of their savings on leisure and recreation, as well as personal services.