Erie Keeps Pace with National Trends
A recent Crexi National Commercial Real Estate Report highlighted national trends on average price per square foot, search behavior, occupancy, and other noteworthy metrics. It got me thinking about trends I’ve noticed in Erie County. Is Erie experiencing trends similar to what’s happening at a national level?
Let’s take a look.
National Trend: Overall asking price averages are seeing positive gains with smaller-sized assets. The average asking price per square foot for new listings rose more than 7%.
This trend is consistent with what we’re experiencing locally. The evolution of hybrid work and employee preferences has begun to push employers to rethink their business office needs. But the physical office isn’t dead; it’s just changed a bit. Large offices (3,000+) aren’t in high demand. But spaces under 3000 square feet are generating demand. I think this shows that businesses recognize the need to have a physical location. I’ve personally leased two commercial spaces this month under this threshold, while larger spaces aren’t generating inquiries. A positive to this is we have inventory under 3,000 square feet available in Erie.
National Trend: Industrial and multifamily led the valuation charge with proven ROI amid rising rates. Multifamily units are the top mover in pricing gains.
As interest rates continue to rise, home ownership has a higher barrier to entry. Interest rates and inflation make it harder for people to save for a down payment. This trend is pushing more people towards, or keeping them in, apartments longer. Investors anticipating increasing demand for multifamily living are driving up prices on multi-units for sale. Locally, two-unit apartment buildings that historically sold for an average of $50,000 per unit are now selling for around $80,000 per unit. But as rents rise, this should translate to higher NOI and better returns for multifamily investors.
National Trend: Buyers continued to place less emphasis on specific markets vs. asset types, with searches by city declining in most MSAs.
Buyers are expanding their search city criteria looking into areas they previously may not have considered. Whether it’s to increase square footage, a transition from renting to owning, or to escape the high cost of living, many remote workers are taking advantage of their newfound location independence by moving out of large cities. This trend is good for Erie, which offers amenities commonly found in larger cities combined with a lower cost of living.
It’s interesting to note how similar the national trends are to what we’re experiencing locally. Contact Garrett S. Shames at Glowacki Management (814) 452-3681 to learn about commercial real estate in Erie County.