At year-end 2022 the Fed is in the middle of their most aggressive financial tightening since 2008, in a desperate attempt to halt rising inflation brought about by huge government deficit spending and supply chain effects from the pandemic and Russia’s war on Ukraine. The Fed’s ongoing quarterly interest rate increases have led to the dreaded “inverted yield curve”, a historical harbinger of a pending recession. This in turn has brought the relatively robust commercial real estate activity of the first three-quarters of 2022 to an abrupt halt here in the fourth quarter.
We now see a growing chasm between seller and buyer pricing expectations; and with realty setting in that the market has indeed changed, price recalibration is beginning to occur. Dwindling investor demand is leading to leveling or declining pricing as cap rates begin to inch higher and the spread with the 10-year treasury tightens. Such a market tends to drive many investors to the sidelines or to seek primarily higher quality assets with established and enduring cashflows.
The news is not all bad however. There is a huge amount of patient capital available for deals that make sense, and fresh opportunities are emerging. By way of example, retail properties are emerging as the new industry darling due to consumers rediscovering the post-pandemic joy and physical and emotional fulfillment of in-person shopping.
| AVAILABLE FOR SALE - Q4 2022 | |||
|---|---|---|---|
| Location | Sq. Ft. | Price | Price/SF |
| Industrial | |||
| 12481 Charles Dr, Grass Valley | 34,950 | $4,800,000 | $137.34 |
| 972 Golden Gate Ter, Grass Valley | 4,864 | $799,000 | $164.27 |
| 12507 Loma Rica Dr, Grass Valley | 1,332 | $140,000 | $105.11 |
| 174-178 Lower Grass Valley Rd, Nevada City | 8,590 | $1,249,000 | $145.40 |
| 258 Railroad Ave, Grass Valley | 1,824 | $479,900 | $263.10 |
| 371 Railroad Ave, Grass Valley | 3,740 | $650,000 | $173.80 |
| 110 Spring Hill Dr # 3 & 4, Grass Valley | 3,952 | $605,000 | $153.09 |
| 110 Spring HIll Dr # 1 & 2, Grass Valley | 5,500 | $795,000 | $144.55 |
| Office | |||
| 512 - 528 Brunswick Rd, Grass Valley | 6,164 | $995,000 | $161.42 |
| 563 Brunswick Rd # 2, Grass Valley | 1,151 | $199,000 | $172.89 |
| 565 Brunswick Rd # 9, Grass Valley | 1,387 | $179,000 | $129.06 |
| 11235 Cliffs Place, Grass Valley | 1,501 | $429,000 | $285.81 |
| 424 Crown Point Cir, Grass Valley | 16,000 | $3,050,000 | $190.62 |
| 443 Crown Point Cir, Grass Valley | 15,264 | $2,500,000 | $163.78 |
| 900 Golden Gate Ter, Grass Valley | 20,000 | $3,500,000 | $175.00 |
| 964 Golden Gate Ter, Grass Valley | 5,740 | $749,000 | $130.49 |
| 224 Main St, Nevada City | 4,670 | $1,225,000 | $262.31 |
| 406 - 412 E Main St, Grass Valley | 7,714 | $1,470,000 | $190.56 |
| 2344 & 2352 Nevada City Hwy, Grass Valley | 3,212 | $600,000 | $186.80 |
| 2611 Nevada City Hwy, Grass Valley | 2,172 | $580,000 | $267.03 |
| 104 New Mohawk Rd, Nevada City | 26,336 | $2,200,000 | $83.54 |
| 819 Whispering Pines Ln, Grass Valley | 24,426 | $3,300,000 | $135.10 |
| Medical/Dental | |||
| 509 S Auburn St, Grass Valley | 1,429 | $590,000 | $412.88 |
| 225 Colfax Ave, Grass Valley | 2,545 | $869,000 | $341.45 |
| 300 Sierra College Dr #165, Grass Valley | 4,787 | $1,900,000 | $329.64 |
| 700 Zion St, Nevada City | 12,000 | $2,700,000 | $225.00 |
| 1061 E Main St # 104, Grass Valley | 1,813 | $265,000 | $146.17 |
| 1061 E Main St # 103, Grass Valley | 1,224 | $199,000 | $162.58 |
| Retail | |||
| 210 Broad St, Nevada City | 21,675 | $2,250,000 | $103.81 |
| 214 Broad St, Nevada City | 1,684 | $895,000 | $564.13 |
| 315 Broad St, Nevada City | 4,979 | $1,350,000 | $271.14 |
| 202 Colfax Ave, Grass Valley | 1,492 | $495,000 | $331.77 |
| 434 Colfax Ave, Grass Valley | 3,052 | $625,000 | $204.78 |
| 840 E Main St, Grass Valley | 28,706 | $4,550,000 | $158.50 |
| 127-129 Mill St, Grass Valley | 1,802 | $599,000 | $332.41 |
| 163 Mill St, Grass Valley | 12,600 | $2,450,000 | $194.44 |
| 16282 Mount Olive Rd, Grass Valley | 5,655 | $625,000 | $110.52 |
| AVAILABLE FOR LEASE Q4 2022 | ||||
|---|---|---|---|---|
| Location | Sq. Ft. | Min Base Price/SF | Max Base Price/SF | |
| Industrial | ||||
| 12048 - 12050 Charles Dr, Grass Valley | 1,500 | $1.00 | $1.00 | |
| 416 Crown Point Cir, Grass Valley | 22,922 | $0.81 | $0.81 | |
| 972 Golden Gate Ter, Grass Valley | 2,536 | $1.14 | $1.14 | |
| 155 Spring Hill Dr # 201, Grass Valley | 2,777 | $0.54 | $0.54 | |
| Office | ||||
| 131 S Auburn St, Grass Valley | 1,066 | $1.50 | $1.50 | |
| 375 Brunswick Rd, Grass Valley | 5,798 | $1.28 | $1.28 | |
| 464-458 Brunswick Rd, Grass Valley | 6,116 | $1.60 | $2.05 | |
| 505 Coyote St, Nevada City | 6,749 | $1.65 | $1.65 | |
| 333 Crown Point Cir, Grass Valley | 6,463 | $1.55 | $1.55 | |
| 350 Crown Point Cir, Grass Valley | 5,089 | $1.55 | $1.55 | |
| 355 Crown Point Cir, Grass Valley | 4,800 | $0.60 | $0.60 | |
| 360 Crown Point Cir, Grass Valley | 8,629 | $1.49 | $1.49 | |
| 431 Crown Point Cir, Grass Valley | 7,900 | $0.85 | $0.85 | |
| 443 Crown Point Cir, Grass Valley | 15,264 | $1.25 | ||
| 488 Crown Point Cir, Grass Valley | 5,168 | $1.60 | $1.80 | |
| 964 Golden Gate Ter, Grass Valley | 3,940 | $0.89 | $1.25 | |
| 13100 Grass Valley/12438 Loma Rica, Grass Valley | 4,960 | $0.69 | $0.69 | |
| 200 Litton Dr, Grass Valley | 1,500 | $1.40 | $1.40 | |
| 12190 Loma Rica Drive, Grass Valley | 2,600 | $1.10 | $1.10 | |
| 900 E Main St, Grass Valley | 5,900 | $1.84 | $1.90 | |
| 970 E Main St, Grass Valley | 1,350 | $1.30 | $1.30 | |
| 944 - 1020 McCourtney Rd, Grass Valley | 12,662 | $1.73 | $1.73 | |
| 104 New Mohawk Rd, Nevada City | 12,000 | $0.79 | $0.79 | |
| 101 - 106 Providence Mine Rd, Nevada City | 5,209 | $1.60 | $1.60 | |
| 200 - 208 Providence Mine Rd, Nevada City | 20,382 | $1.60 | $1.60 | |
| 310 Providence Mine Rd, Nevada City | 20,282 | $1.75 | $1.85 | |
| 351 - 356 Providence Mine Rd, Nevada City | 1,736 | $1.78 | $1.78 | |
| 400 Providence Mine Rd, Nevada City | 72,110 | $1.15 | $2.15 | |
| 420 Sierra College Dr, Grass Valley | 1,750 | $2.20 | $2.20 | |
| 1012 Sutton Way, Grass Valley | 3,200 | $1.87 | $1.87 | |
| 841 - 857 Sutton Way, Grass Valley | 601 | $1.75 | $1.75 | |
| 819 Whispering Pines Ln, Grass Valley | 5,200 | $0.85 | $0.85 | |
| Medical/Dental | ||||
| 402 S Auburn St, Grass Valley | 2,880 | $1.50 | ||
| 563 Brunswick Rd # 5, Grass Valley | 1,473 | $1.15 | $1.15 | |
| 123 Margaret Ln, Grass Valley | 1,550 | $1.60 | ||
| 700 Zion St, Nevada City | 12,000 | $1.36 | ||
| Retail | ||||
| 10052 Alta Sierra Dr, Grass Valley | 540 | $1.35 | $1.35 | |
| 114 Argall Way, Nevada City | 1,159 | $1.21 | $1.21 | |
| 133 Argall Way, Nevada City | 2,700 | $1.25 | $1.25 | |
| 233 Broad St, Nevada City | 4,000 | $2.25 | ||
| 650 Freeman Ln, Grass Valley | 13,886 | $1.95 | $2.20 | |
| 840 E Main St, Grass Valley | 18,618 | $1.60 | $2.85 | |
| 138 E Main St & 131 Richardson St, Grass Valley | 2,187 | $1.00 | $1.00 | |
| 111 W McKnight Way, Grass Valley | 8,183 | $1.50 | $2.15 | |
| 2032 - 2118 Nevada City Hwy, Grass Valley | 2,925 | $1.56 | $1.56 | |
| 399-471 Sutton Way, Grass Valley | 1,402 | $1.45 | $1.45 | |
| 526-720 Sutton Way, Grass Valley | 2,250 | $2.85 | $2.85 | |
| 102 - 108 Union St, Nevada City | 1,843 | $2.00 |
| RECENT TRANSACTIONS - Q4 2022 | |||
|---|---|---|---|
| Location | Sq. Ft. | Sale/Lease | Close Date |
| 1005 Sutton Way, Grass Valley | 25,208 | Sale | 10/17/2022 |
| 206 W Main St, Grass Valley | 3,950 | Sale | 10/17/2022 |
| 908 Taylorville Rd, Grass Valley | 11,676 | Sale | 10/24/2022 |
| 824 Zion St, Nevada City | 1,217 | Sale | 10/24/2022 |
| 426 Sutton Way, Grass Valley | 1,460 | Lease | 11/9/2022 |
| 404 S Auburn St, Grass Valley | 912 | Sale | 11/15/2022 |
| 5961 W Oaks Blvd, Rocklin | 11,613 | Sale | 11/29/2022 |
| 310 Broad St, Nevada City | 1,200 | Lease | 12/15/2022 |
| 400 Providence Mine Rd, Nevada City | 3,989 | Lease | 12/15/2022 |
| 830 Zion St, Nevada City | 1,960 | Sale | 12/16/2022 |
