CRE Sellers Adjust Expectations

According to Real Capital Analytics March issue of “Capital Trends” after a dismal 2009 industrial real estate pricing is becoming more realistic

“For would-be sellers of commercial property, 2009 was one tough year. An astonishing 83% by volume (89% by number) of properties offered in the first nine months of 2009 failed to sell. Apartment offerings fared slightly better with a success rate of 25% while hotels proved the toughest sell – fewer than 10% of the offerings closed. They predict that in 2010 distressed sellers will not dominate but will be a significant part of the market, with the rest holding on in hopes of rising values.

"The user/other sector has steadily grown its share of the sales market in the latter half of the decade, and so far this year this group is offering – and closing - more asset sales than most.

“Private investors, end users and public companies accounted for the lion’s share of industrial property sales in 2009, …but that picture is shifting rapidly as the New Year settles in. Private investors remain the most active, but public companies have scaled offerings and sales back dramatically while institutions have ramped up, accounting for nearly a quarter of all activity this year. Lenders have remained a minor component of sales activity year to date, yet have heavily increased their assets on offer to nearly 40% of all industrial properties for sale in 2010.”