There were a reported $809 billion in US commercial real estate sales last year — a record. Photo by Markus Spiske on unsplash.com.
Written by Edward Smith
A pandemic, chronic material and labor shortages and record-high inflation were not enough to slow record commercial real estate sales in 2021.
While doubling 2020’s numbers may not have been a high bar to pass, the $809 billion in sales in 2021 even surpassed the previous record of $600 billion for 2019, according to data from Real Capital Analytics.
The U.S. market also surpassed sales records in November, with Q4 sales past $300 billion. Apartment transactions comprised nearly one-half of total deal volume. The industrial market experienced the largest growth of property sectors with a year-over-year gain of 29.2%, compared to the 22.9% average reported across all markets.
Locally, six brokerages reported 67 transactions in 2021 totaling $334.14 million. The numbers were shared with The Business Journal for its list of Largest Commercial Real Estate Deals published Jan. 25.
Industrial properties and multi-family properties have also been driving sales in the Central Valley. The largest commercial real estate deal reported in 2021 was a lease in the North Pointe Business Park totaling $41 million, brokered by Newmark Pearson Commercial. Permits filed with the City of Fresno listed Amazon as the tenant.
Multi-family sales in the Central Valley have been driven not only by demand, but also record high rents.
The New York Times reported Fresno as experiencing the highest year-over-year increase in the nation with a 28% jump to median one-bedroom rent of $1,410.
Luxury apartment Rock Ranch debuted in North Fresno, with amenities such as programmable doors and lights. Increasingly, these high-end apartment projects are the ones that pencil out best considering fees and regulatory costs, according to developers.
Even in a drought, ag sales showed no slowing. Visalia-based Schuil & Associates reported the highest ag sale with 6,800 acres of almonds and open land sold near Five Points in Fresno County for $70 million. Marc Schuil, Scott Schuil, Jonathan Verhoeven and Doug Phillips brokered the deal.
Followed closely behind were two sales by Pearson Realty, both more than $60 million. A $66 million deal in Dos Palos included nine homes in a labor camp brokered by Dan Kevorkian of Pearson Realty. A $64 million deal included 1,843 acres of grapes, almonds, pistachios and open land brokered by Stanley Kjar, Jr. and A.J. Ferdinandi, also with Pearson.
Despite a lucrative year for sales, Central Valley commercial construction numbers dipped year-over-year, according to the Construction Monitor, which tracks construction permit activity. Some $852.9 million was reported in construction permit valuation in Fresno, Kings, Madera and Tulare counties for 2021, with remodels and additions leading the way. Construction in 2020 topped $1 billion, lead by new structures. The $239 million of industrial and warehouse construction in 2020 topped that of 2021 by nearly $140 million.