2013 Frederick Commercial Real Estate Sales Jump 40%
This past year was a year of growth for Frederick's commercial real estate market, in both year-over-year dollar volume and transaction volume.
Since 2012, MacRo has been tracking all sales of commercial real estate in Frederick County by segment. We were pleased to see Frederick County post $275 million worth of commercial real estate sales versus about $200 million in 2012. That's a nearly 40% increase in dollar volume.
In addition, the number of commercial real estate sales transactions increased by over 20% from 2012 (149 transactions versus 123). While two years is hardly enough data to begin tracking trends, it is nevertheless encouraging to see sales growth heading in the right direction – up!
The category that only earned 7.7% of the dollar volume in 2012 jumped to the top of the heap with a 21.8% share last year was that of existing multifamily rental and apartment properties with nearly $59 million in sales.
Hotel property sales fell from a 20.2% share to 5.8% with nearly $16 million in transactions.
Two of the most hopeful signs to see in the market were that existing office property, which has been struggling with high vacancy rates since the bubble burst, increased 47% in sales volume to a 2013 figure of $42,230,000. And if that’s not enough the overbuilt warehouse and flex property soured by 66% over the previous year from $32 million to nearly $53 million in transaction volume….very encouraging signs for the times!
To get a more detailed look at these statistics, check out my link on the MacRo Report Blog to view interactive charts which highlight commercial real estate sales in Frederick County for 2013 and those for the 4th quarter of 2013 by market segment. They provide information that is based on both dollar volume and number of transactions.
Considering our local economy had to dodge sequestration, the fiscal cliff, and the rollout of Obamacare (not to mention Gov. Martin O'Malley himself) the results aren't half bad.
While these figures are not necessarily astounding compared to a decade ago, overall activity in our local commercial real estate market appears to be improving.
The prices – at which most of these properties have sold for – still make it hard to justify new construction that is anything other than those custom built for the owner-user.
Looking into my crystal ball (with a little help from my friends), it is likely that this positive trend will continue, as more investors continue to cautiously step into the commercial real estate market to find higher returns on their money.