What’s Trending in Commercial Real Estate – 2018 Q3 Review

Current trends in commercial real estate differ depending on the particular market segment – be it office, retail or industrial. As shown in the statistics below, our local office sector has been the slowest to recover from the Great Recession and currently remains the softest of the three property types. This is due primarily to structural and cultural changes in the way we work. Technology has reduced the space required by way of electronic/cloud storage, smaller computing devices, and portability. Telecommuting and working from home are now culturally acceptable. Emphasis on collaboration and teamwork is facilitated by co-working spaces and open-office floorplans requiring significantly less space than in the past.

Retail property trends can be defined with one word – Amazon. On-line retail sales are accelerating at an ever-increasing pace, affecting the ability of ‘brick and mortar’ stores to compete (think Sears).  However, all is not lost for retail property owners, as internet sales will not limit the need of commercial space for food, fitness and fun. Larger malls and shopping centers will over time transition to more entertainment-based centers, while strip centers and freestanding retail properties will rely on greater percentages of medical services, financial/legal services, food/groceries, cafes/restaurants/bars, and health/beauty/fitness/personal services. Tourist-based and unique retail stores prevalent in destination locations such as our historic Downtowns should retain their appeal and viability.

Our industrial market is today’s shining star. We have a tight local inventory of available industrial space with rents increasing at a higher rate than other sectors. We are beginning to see an influx of millennial families with children seeking a better quality of life than now afforded by large cities. They are bringing with them small businesses and cottage industries that fit nicely into industrial space, which also happens to be the least costly commercial space on the market. Industrial properties with high open ceilings are now in vogue, not just for manufacturing and warehousing, but also for various office uses desiring hip “loft” spaces.

Each commercial property segment has its advantages and disadvantages, but these do change over time so it is always good keep up to date on industry trends before making large financial commitments.

Vacancy RatesEOY 2015EOY 2016EOY 20172018 YTD
Office14.49%13.14%13.86%13.11%
Retail4.58%3.57%2.63%3.38%
Industrial3.36%3.45%2.08%3.18%
All Sectors7.48%6.72%6.19%6.56%
Median Sale & Lease “List” PricesOfficeRetailIndustrial
Sale Price per Square Foot$173$219$140
Gross Lease Rate per Square Foot$1.30$1.33$.81
AVAILABLE FOR SALE Q3 2018   
LocationSq. Ft.PricePrice/SF
Industrial
10662 E Bennett Rd, Grass Valley5,202$695,000$133.60
150 Crown Point Ct, Grass Valley20,000$3,099,000$154.95
12521 Loma Rica Dr, Grass Valley1,344$110,000$81.85
174-178 Lower Grass Valley Rd, Nevada City8,320$1,249,000$150.12
305 Richardson St, Grass Valley1,352$179,000$132.40
110 Spring Hill Dr #19, Grass Valley2,124$374,900$176.51
143 Spring Hill Dr Ste 1A, Grass Valley5,200$995,000$191.35
Office
563 Brunswick Rd # 7, Grass Valley1,591$199,000$125.08
256 Buena Vista St A-F, Grass Valley7,156$630,000$88.04
154 Hughes Rd #5 & 7, Grass Valley1,401$250,000$178.44
154 Hughes Rd #4, 6 & 8, Grass Valley648$130,000$200.62
154 Hughes Rd #2, Grass Valley650$150,000$230.77
154 Hughes Rd #1, Grass Valley1,350$280,000$207.41
154 Hughes Rd #7, Grass Valley1,428$250,000$175.07
900 E Main St, Grass Valley23,500$2,000,000$85.11
944 - 1020 McCourtney Rd, Grass Valley48,336$6,600,000$129.58
104 New Mohawk Rd, Nevada City26,336$3,495,000$132.71
351-357 Providence Mine Rd, Nevada City1,152 – 1,800From $275,000$195.42
Medical/Dental
1061 E Main St # 103, Grass Valley1,224$146,800$119.93
1061 E Main St # 201, Grass Valley1,137$189,000$166.23
225 Colfax Ave, Grass Valley2,545$689,000$270.73
411 Coyote St, Nevada City1,842$629,000$341.48
150 Glasson Way, Grass Valley6,462$990,000$153.20
105 Margaret Ln, Grass Valley2,460$411,000$167.07
590 Searls Ave, Nevada City5,575$2,000,000$358.74
300 Sierra College Dr #250, Grass Valley1,740$595,000$341.95
300 Sierra College Dr #165, Grass Valley4,787$1,450,000$302.90
Retail
124 Bank St, Grass Valley3,886$825,000$212.30
210 Broad St, Nevada City27,915$2,275,000$81.50
426 Broad St, Nevada City1,333$699,999$525.13
232 Commercial St, Nevada City1,710$695,000$406.43
206 W Main St, Grass Valley3,950$995,000$251.90
2391 Nevada City Highway, Lot 3, Grass Valley19,034$7,478,000$392.88
1125-1165 Sutton Way, Grass Valley24,539$3,500,000$142.63
AVAILABLE FOR LEASE Q3 2018   
LocationSq. Ft.Min Base Price/SFMax Base Price/SF
Industrial
12048 - 12050 Charles Dr, Grass Valley1,200$0.59$0.59
150 Crown Point Ct, Grass Valley20,000$0.80$0.80
201-204 Gold Flat Ct, Nevada City3,000$0.90$0.90
13340-13346 Grass Valley Ave, Grass Valley4,000$0.66$0.66
13366 Grass Valley Ave, Grass Valley7,850$0.66$0.66
143 Spring Hill Dr Ste 1A, Grass Valley5,082$1.23$1.23
1020 Whispering Pines Ln, Grass Valley2,132$0.79$0.79
Office
120 N Auburn St, Grass Valley483$1.86$1.86
124 S Auburn St, Grass Valley5,100$0.55$0.55
131 S Auburn St, Grass Valley1,994$1.51$1.51
375 Brunswick Rd, Grass Valley6,791$1.28$1.28
464-458 Brunswick Rd, Grass Valley7,278$1.58$2.06
512 - 528 Brunswick Rd, Grass Valley742$1.00$1.00
563 Brunswick Rd # 7, Grass Valley1,591$1.26$1.26
580 Brunswick Rd, Grass Valley4,950$1.95$1.95
124 Clydesdale Ct, Grass Valley10,866$0.75$0.75
333 Crown Point Cir, Grass Valley10,224$1.70$1.70
350 Crown Point Cir, Grass Valley5,550$1.40$1.40
355 Crown Point Cir, Grass Valley12,000$0.60$0.60
360 Crown Point Cir, Grass Valley9,603$1.39$1.49
431 Crown Point Cir, Grass Valley11,100$0.85$0.85
488 Crown Point Cir, Grass Valley5,168$1.62$1.62
13100 Grass Valley Ave & 12438 Loma Rica Dr, GV13,277$0.50$0.66
154 Hughes Rd #5, Grass Valley922$0.95$0.95
154 Hughes Rd #6 & 8, Grass Valley648$0.95$0.95
154 Hughes Rd #4, Grass Valley648$0.95$0.95
154 Hughes Rd #7, Grass Valley1,428$1.25$1.25
200 Litton Dr, Grass Valley3,000$1.40$1.40
900 E Main St, Grass Valley8,500$1.15$1.15
970 E Main St, Grass Valley750$1.10$1.10
111 Margaret Lane, Grass Valley2,900$1.25$1.25
944 - 1020 McCourtney Rd, Grass Valley5,537$1.55$1.55
208 Gold Flat Ct, Nevada City4,984$0.95$0.95
101 - 106 Providence Mine Rd, Nevada City1,650$1.41$1.43
200 - 208 Providence Mine Rd, Nevada City13,529$1.47$1.48
351 Providence Mine Rd, Nevada City1,152$1.80$1.80
352 Providence Mine Rd, Nevada City1,530$1.60$1.60
353 Providence Mine Rd, Nevada City1,704$1.70$1.70
357 Providence Mine Rd, Nevada City1,800$1.75$1.75
400 Providence Mine Rd, Nevada City6,265$0.95$0.95
400 Providence Mine Rd, Nevada City72,110$0.95$0.95
400 Providence Mine Rd, Nevada City71,985$0.95$0.95
360 Sierra College Dr, Grass Valley2,519$1.96$1.96
420 Sierra College Dr, Grass Valley1,750$1.90$1.90
165 Spring Hill Dr, Grass Valley2,500$1.00$1.00
401 Spring St, Nevada City200$1.29$1.29
1012 Sutton Way, Grass Valley3,200$2.83$2.83
431 Uren St, Nevada City2,210$1.22$1.47
1415 Whispering Pines Ln, Grass Valley8,009$1.60$1.60
900 Whispering Pines Ln, Grass Valley4,000$0.65$1.00
Medical/Dental
150 Glasson Way, Grass Valley5,720$1.35$1.55
470 S Auburn St, Grass Valley2,111$1.30$1.30
105 Margaret Ln, Grass Valley1,100$1.30$1.30
123 Margaret Ln, Grass Valley1,200$1.30$1.30
113 Presley Way, Grass Valley1,450$0.98$0.98
590 Searls Ave, Nevada City1,472$1.97$1.97
404 Sierra College Dr, Grass Valley1,000$1.65$1.65
Retail
408 Broad St & 405 Commercial Street, Nevada City860$1.40$1.40
102 Catherine Ln, Grass Valley5,496$1.25$1.50
650 Freeman Ln, Grass Valley15,717$2.20$2.20
533-537 E Main St, Grass Valley14,300$1.20$1.20
840 E Main St, Grass Valley6,727$1.60$1.60
105 W Main St, Grass Valley6,160$1.23$1.23
633 - 653 Maltman Dr, Grass Valley8,175$1.01$1.01
111 W McKnight Way, Grass Valley10,246$2.06$2.06
102-108 Mill St, Grass Valley1,300$1.53$1.53
114 Mill St & 115 S Church St, Grass Valley1,700$1.00$1.00
2032 - 2118 Nevada City Hwy, Grass Valley9,769$1.76$1.76
984 Plaza Dr, Grass Valley8,395$1.35$1.35
345 Railroad Ave, Nevada City2,200$0.85$0.85
RECENT TRANSACTIONS Q3 2018   
LocationSq. Ft.Sale/LeaseClose Date
2391333 Crown Point Cir, Grass Valley3,378Lease6/11/2018
399-471 Sutton Way, Grass Valley1,296Lease7/16/2018
152 S Auburn St, Grass Valley4,414Sale7/20/2018
202 W Main St, Grass Valley1,650Sale7/31/2018
217 W Main St, Grass Valley1,188Sale7/31/2018
345 Crown Point Cir, Grass Valley815Lease8/15/2018
11976 Charles Dr, Grass Valley2,550Sale8/22/2018
565 Brunswick Rd # 15, Grass Valley1,554Sale8/31/2018
12497 Loma Rica Dr, Grass Valley1,332Sale9/14/2018

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