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Growth in commercial real estate valuations lagging

On Behalf of | May 20, 2016 | Uncategorized

Kansas residents who are involved in commercial real estate might want to know about the real estate valuation figures that were released for April. Month-over-month, commercial real estate grew by 0.6 percent. This growth was also a 7-percent increase over the numbers from April 2015.

The pricing index, Ten-X Commercial Real Estate (CRE) Nowcast, released the data. The company combines information it culls from Google Trends and combines it with its own transaction information and investor surveys to make predictions about the immediate trends in the market that can be expected.

The index’s chief economist indicated that while the growth is positive, it still lags behind what should normally be expected for annual growth in the price cycle for the industry. He further pointed to the hotel sector as slowing significantly while the apartment sector showed the strongest growth. The hotel numbers fell by 1 percent from March to April and is now up by only 0.5 percent since the year’s beginning. Apartments, by contrast, showed an increase of 1.8 percent month-over-month and is now up by 8.9 percent year-over-year.

Those involved in commercial development might want to take heed of the data. It demonstrates areas in the market that are weaker and areas that are stronger. Developers may want to seek advice from the business and commercial law attorneys regarding potential projects they may be considering. Lawyers may help with conducting good market analysis and then advising their clients about whether or not the timing is right. For projects that are in progress, lawyers may work to get needed permits and variances so their clients’ projects might move forward as planned.