Multiple Offers Come to Commercial Real Estate

Connecticut has been experiencing a lack of adequate supply in residential real estate for some time now.  It's what we call a "seller's market", meaning that there aren't enough listings to satisfy the demand.  This obviously pushes up prices and lowers time on the market.  It also leads to more than one offer at a time on certain listings, which hasn't happened with such frequency in quite a while.

Lately, we are seeing this trend in on the commercial side as well.  With certain types of real estate, especially warehouse and investment, there aren't enough properties on the market.  This is partially due to the fact that very little has been built in recent years, but changes in demand have also affected us.  

One such trend is the move out of bigger cities into smaller ones.  This has increased during the pandemic, and is leading to a resurgence for places where social distancing is easier.  Offices are less affected, because so many people are actually working from home.  Retail has been impacted by e-commerce.  Even industrial properties, though, have seen the uptick in demand.  

Location is also about proximity to larger markets, so it isn't just about where people want to live.  Our real estate is more affordable, and transportation is available to both Boston and New York. We have become very attractive to investors for these reasons, leading to an increase in multiple offers.

We expect this to continue, and we need more listings, in order to satisfy buyers.  Normally, summer would be slow, but that won't be true this summer. Fewer people are traveling, and more want to buy, rent, and sell before a possible second wave of COVID.  So think about your long-term goals, and call a commercial agent soon!

Commercial Follows Residential

One of the truisms we know about real estate is that commercial usually lags residential by nine months to a year, whether it is going into a recession or coming out of one.  Well, here we are again.  The residential market in most parts of the country has already shifted from a buyer's market to a seller's market, largely due to lack of supply.  While Connecticut is lagging behind other places, it too is showing signs of marked improvement.  Prices here have not risen on the whole, but are certainly poised to do so at any time.  Multiple offers are commonplace lately, and inventory in certain submarkets is tight.

What does that augur for commercial sales and leases? We expect to see increasing demand and decreasing supply by the middle of the year, and much of that will be tied to consumer demand.  If you look around any restaurant, you can see that purse strings have loosened.  Retail is turning around, and, if we're lucky, office will follow.  Let's all hope so!