2015 - Another Year of Records
As we wrap up another year of record commercial real estate sales and leases, I want to share some of the highlights of last year. Low interest rates continued to aid in the compression of cap rates for investment properties. While the average retail cap rates were around 6.5%, some national credit rated tenant’s properties were selling at unprecedented rates as low as 4%!
Locally we saw commercial property sales in Grand Traverse County increase 10% from 55 to 60 sales in 2015 compared to 2014. While the average sale priced decreased from $373,600 to $304,100 it is important to note that we did not have as many sales of large buildings in 2015. In fact, the average size of buildings sold in 2015 was 5,305 SF whereas it was 7,847 SF in 2014. This means that our average sales per square foot increased from $48/SF in 2014 to $57/SF in 2015. That is an increase of 19%. We also saw the average sale time fall from 445 days to 376 days as fewer properties came on the market. For 2015 we saw average sales price for office properties of $93/SF, Retail properties at $109/SF and Industrial properties of $35/SF.
We saw the largest increase in volume in our leasing activity in Grand Traverse County that we have seen in a long time. The total number of leases increased from 69 to 89 which is a 29% increase. Fewer spaces became available for lease and the percent of new listings that leased last year went to a record 44% (it was only 29% in 2014). I am proud to say that I completed 23 of the lease deals reported in Northern Great Lakes Realtors MLS (NGLRMLS) for a total of 26% of all the leases done in the county.
I want to thank all of you, my readers, friends & family for the referrals over the past year. Your support means a lot and helped me complete 11 sales last year with almost 20% of all the sales and 30% of the total sales volume as reported in NGLRMLS.
For a summary of the National market and cap rates, Boulder Group has a good report published and here is a link to that http://www.bouldergroup.com/2015-Q4-Net-Lease-Research-Report.pdf
Personal Property Tax Reminder
Recent changes to the personal property tax have allowed for businesses with under $80,000 in assets to claim an exemption from personal property tax this year as it has in the past few years. However, businesses must file an exemption form EACH YEAR and it must be filed by February 10th at the latest. If this form is not received in the assessor’s office on or before this date, there is no exemption and your business will need to pay the 2016 property tax.
Have a Happy New Year!
Dan Stiebel, CCIM