Experienced Kansas City Construction Law Firm

  1. Home
  2.  → 
  3. Uncategorized
  4.  → Commercial real estate sales up

Commercial real estate sales up

On Behalf of | Aug 7, 2015 | Uncategorized

If Kansas follows the national trend, commercial real estate sales are set to be up in 2015. However, purchases of some income-generating properties also appear to be slowing down in the real estate market.

The year 2006 was the last time that there was a real soar in commercial real estate. However, the first half of 2015 realized an increase of 36 percent for properties that were sold above $2.5 million, slightly exceeding the pace in 2006. These figures are based on the sale of commercial real estate such as shopping malls, apartment complexes and office buildings above the $2.5 million threshold. Additionally, there was an increase in the average price of such properties sold, going from about $13.9 million in 2014 to $16.3 million in the first half of 2015. There have been increases in sales across many markets across the country, including Los Angeles, New York, Chicago, San Francisco, St. Louis, Orlando and Palm Beach.

However, real estate professionals say that the increase in commercial development and sales is different than the last boom in 2006. They cite examples of when investors would borrow more than the value of the property, hoping that the market would be greater than expenses. However, investors in 2015 commonly invest more of their own money than the money they rely on banks to give them. This is partly because investors and lenders are more cautious than they were a decade ago. Additionally, even though there has been a spurt of sales in 2015, the second quarter showed a significant decrease in sales compared to the first quarter of the year. Of the increases, industrial and suburban offices realized the greatest rate of growth.

Investors who are considering the purchase of commercial real estate may choose to discuss this prospect with a real estate lawyer. Legal counsel may be able to evaluate land use restrictions and potential agreements to determine if there is a good deal.