How's Business Going?

How's Business Going?

We keep reading about what a great place Northern Michigan is to live and about the growth and new events that are occurring around our region.  The Epicurean Classic, Film Festival, and Porterhouse Events are a few of the recent additions to our area.  Sleeping Bear Dunes just got voted #1 place in America.  So how is commercial real estate doing and what is needed by the business community?

So far 2011 has been a stellar year compared to the past few years.  Let’s look at some statistics for the first eight months of the year compared to the first eight months of 2010.  Sales in Grand Traverse County are up 45% over last year.  While the average asking price is down 11% from last year, the average sold price is up 27%!  Sellers are getting more realistic in their pricing expectations and sales are improving as a direct result.

As for leasing, the change is even more pronounced.  Leasing activity for Grand Traverse County is up 92% over the first eight months of 2010.  Average lease rates are down 10% reflecting landlord’s desires to get space leased and the competition that exists in the market.  More good news is there were 21% less new spaces listed for lease this year.  That translates to 37% of the increased inventory being leased this year compared to 15% last year. As we see this kind of increased absorption, it will certainly lead to higher lease rates in the coming years as fewer options are available for tenants.

Since there have been very few new developments in the past few years, the increase in current demand should translate to an increase in pricing as the available inventory shrinks and new developments are needed.  Business is good in Traverse City, and it is a great place to live and to invest in real estate.

-Dan Stiebel, CCIM

Dan Stiebel

Dan Stiebel

Associate Broker
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