The Tortoise and the Hare – 2016 Q4 Review

As in Aesop’s Tortoise and the Hare fable, California’s coastal communities (the “Hare”) continued enjoying a fast-paced and robust economic recovery in 2016, while smaller inland suburbs and tertiary markets like Nevada County (the “Tortoise”) continued on a much slower and steadier growth trajectory. Continuing with the story line, the moral looking forward may be that the Hare is now feeling spent and over-heated (i.e. over-priced with little remaining upside) while the Tortoise is just getting its second-wind and approaching top speed (i.e. primed for strong growth and much greater appreciation in the coming year).

Commercial transactions – defined as the number of office, industrial and retail closed sales – ended the year slightly up from 2015, while transaction dollar volume dropped. This anomaly was primarily due to the inordinate effect of a very large retail deal occurring in 2015.

The overall vacancy rate for all property types stood at a healthy 6.7% at year end. Breaking this down further, office space remained our softest market with about 13% vacancy, while retail and industrial space ended the year with very limited supplies of under 4%.  Median prices for office and industrial product climbed just slightly year-over-year, while retail prices experienced a larger 17% increase.

With a new pro-business President-elect, 2017 could be a very interesting and exciting year for commercial real estate in Nevada County.

Subscribe to Commercial Property Review

Subscribe to Commercial Property Review

Stay on top of the market. Get breaking news and data for the Nevada County commercial real estate market as soon as it's published.

These quarterly reports detail local commercial lease rates, vacancies, sales prices & volume, recent transactions and more!

Subscribe Now