BIG PRICES SLOW INVESTMENT IN COMMERCIAL REAL ESTATE MARKET

Commercial Real Estate investors are being more selective of new deals as the commercial property market is on the decline. Many see this as a time to sell assets and embark on less risky deals. With an 11% decrease in commercial Real Estate deals in 2016, increase selling could create more stress on the market.

Less debt and a stronger economy means investors see select commercial properties will not crash as in 2008 but will continue to have high occupancy rates. While office buildings, apartments, and commercial properties may not have a major downturn, online shopping has weakened the value of retail spaces.

Will this market signal to investors in the local Santa Cruz Commercial Real Estate market to have more caution when considering purchasing or developing commercial real estate in the Monterey Bay area?

Reference: Wall Street Journal, February 2017