Colorado Commercial Practitioners Regaining Confidence
It’s been a longer road for Colorado Commercial REALTORS® to rebound, however according to NAR 2013 Commercial Member Profile income, transactions and sales volume has increased over the past year. REALTOR® Associations still continue to advocate for financing.
Since the economic depression the commercial real estate market has struggled to regain its grounding. REALTORS® who practice commercial real estate reported a median annual gross income of over $90,000 in 2012. This is the highest level since 2008 and is over $4,000 more than in 2011.
NAR’s chief economist, Lawrence Yun recently weighed in on commercial market conditions pointing out that vacancy rates are modestly falling and rents are moderately rising nationwide. Vacancy rates for offices, industrial buildings and shopping centers in Colorado are hovering around 11.9 percent.
However, financing still remains a challenge for buyers, especially those purchasing smaller properties. According to NAR’s Commercial Real Estate 2013 Lending Survey, REALTORS® reported a significant disadvantage when it came to financing for buyers of properties under $2 million, which makes up 85 percent of REALTORS®’ clients in the commercial sector. These small business are typically financed by private investors or local and regional banks. Fifty-two percent of commercial members reported they had commercial transactions fail in the past year due to a lack of financing.
Recently proposed legislative and regulatory initiatives, as well as the regulatory uncertainty of financial institutions are accounting for the lack of capital in commercial lending for smaller properties. Colorado Association of REALTORS® along with NAR believes in protecting and enhancing the flow of capital to commercial real estate.
With more liquidity in the market, conditions would certainly improve, said Keith Kanemoto president of CAR and a commercial REALTOR®. “REALTORS® build communities and those who practice commercial real estate help revitalize those communities. They facilitate investment and promote the sale and lease of commercial space, which supports millions of jobs nationwide. It’s imperative that we continue to advocate for enhancing the flow of capital to commercial real estate.”