2013 Recap for Commercial Real Estate in Northern Michigan
What a difference a year makes! While the economic recovery has been underway for a few years, I would say that 2013 was the first year we’ve seen a major shift in consumer thinking. It seems consumers, investors and real estate buyers have turned… OPTIMISTIC.
For the third year in a row the commercial real estate market in Traverse City has beat expectations and average sale prices are up. After being down for the first 3 quarters of the year, the fourth quarter saw a strong finish with multiple sales breaking through the one million dollar mark. The average sales price of commercial property in Grand Traverse County ended the year up 9% from 2012 and up 25% for the whole MLS area! In Grand Traverse County, there were 22% more properties listed in 2013 than the previous year and an increase of 8% in the total number of properties sold. The average sales price was 93% of list price, which was the highest level we have seen in the past 10 years.
Buyers were competing for value properties and fewer have been coming on the market. With the federal government announcing it will begin tapering its quantitative easing, interest rates are anticipated to go higher next year. That coupled with strong increases in residential prices led to a sense of urgency among investors to lock in low prices and beneficial financing in 2013. Analysts expect values to increase 3-6% in 2013 as rising interest rates apply downward pressure on price increases. Home loan rates increased almost a full percentage point last year, but competition among banks and other commercial lenders held commercial loan rates in the mid 4%’s for well qualified buyers.
Leasing activity continued to remain strong with a 17% increase in the number of completed lease transactions for GT County. This was just above a 16% increase in the number of spaces listed for lease.
The Dan Stiebel team had a record year in 2013. We completed over 13 million in closed transaction volume throughout Northern Michigan. This included 29 landlord and tenant lease sides completed (37% of the market in GT county) and 8 buyer & seller side transactions. Of the 132 sales & leases done in 2013 in Grand Traverse County, we did 37 of them, which represent 28% of the total commercial listings sold and leased. I would like to thank all of you for your support and referrals this past year! I could not have achieved these goals without the great recommendations you have passed along to your friends and colleagues with a commercial real estate need.
Wishing you all a Happy and Healthy New Year!
-Dan Stiebel, CCIM