If you are looking to sell, purchase or lease commercial real estate in Grass Valley or Nevada City in 2018, the following summary of market activity over the past year should be of interest.
Generally speaking, the local market has been tightening, with rents and sale prices increasing even though transaction volume decreased year-over-year from 2016 to 2017. 2017 seemed to be a transition year, with business confidence growing but investors and companies still treading carefully while becoming accustomed to a new political atmosphere. Strong activity in early 2018, however, indicates that pent-up demand is finally pulling investors and businesses off the sidelines. First quarter activity shows a marked increase in both lease and sale transactions, as vacancy rates among all product types continue to fall.
We predict lease rates and sale prices will continue to increase during 2018 as there is minimal new supply under construction or in the planning stages. Commercial tenants would be wise to consider longer term leases to attempt to nail down today’s current lease rates. Inflation and rising interest rates have now entered into the equation. Investors looking for a hedge against these concerns would be wise to consider commercial real estate at this time in order to lock-in still relatively attractive financing terms and to benefit from rental income growth and property appreciation.