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A Sobering Big Picture: Frederick County 2016 Commercial Real Estate Sales Results

Posted by Rocky Mackintosh on February 01, 2017 Leave a comment

Number of transactions trending sharply downward, dollar volume holds to prior year levels with a few bright spots along the way.

Volume-Trans2012-2016 Frederick Commercial Real EstateThe statistics for 2016 are in, and digested. On the surface they mirrored those of 2015, but differed a lot down in the weeds. In this week’s post we’ll look at the Big Picture, with details by sector to follow next time.

Overall transferred dollar volume only increased by a mere 1.01% from over the previous year, but ticking up from $300,840,856 to $304,310,468. While this figure is not much of an upward movement, it is a 50% increase over similar CRE stats for 2012!

However, a sobering trend has begun to take shape when one studies the actual number of transactions year over year. They have fallen steadily to 132 closed deals from the 2103 high of 150 transactions.

2ND IMAGE 2016 CRE Sales FC 020117.jpg

In addition, while the number of transfers above the $5 million mark fell by 40% (from 15 to 9) the dollar volume popped by 4.2% from $197 million to $205 million in 2016. At the same time the number of deals made under $5 million in 2016 fell from 128 in 2015 by only 5 in 2016 to 123. This 4.1% decline closely matched the drop in the total value of CRE sales of 4.6% from $104 million to $99 million.

Yes, you read that right. The nine transactions which exceeded $5 million last year were twice that of the 123 closed transfers under that mark (67% vs 33%) … Go Figure!?! This differs only slightly over the 65% vs 35% ratios of 2015.

So from up in the clouds, things look stable and actually increasing from past years. Consider that the average sales price moved up 10 % from 2015’s $2.1 million to a respectable $2.3 million.

How will comparative figures shake out in the breakdown of the eight sectors we track?

  1. Mixed Commercial/Residential
  2. Warehouse/Industrial
  3. Office
  4. Retail
  5. Commercial Land
  6. Multifamily
  7. Hospitality
  8. Special Purpose

What is happening with the steady drop in overall commercial real estate transactions?

Stay tuned!

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Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He has been an active member of the Frederick, Maryland community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012.  He currently serves as chairman of the board of Frederick Mutual Insurance Company. Established in 1843, it is one of the longest enduring businesses in Frederick County.

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Topics: Commercial and Industrial Real Estate Ashleigh's Fields Notes