From April through June, the South Coast recorded just nine total sales of commercial property, a drop from 15 during the same period in 2019. The dollar value was also much lower — $14.2 million this quarter versus $69.2 million for the second quarter in 2019.
“It’s clear that in addition to fewer sales, we are seeing smaller price points on buildings,” according to Radius’ quarterly report. “The pandemic and its effects on the economy in general has draped a blanket of inactivity over the market, keeping most investors on the sidelines and few owner-users poking their heads out for deals. Even in spite of low interest rates, lenders have been leery of granting new loans and may also be girding for possible defaults, making borrowing a tedious process at this time.”
According to Radius, the best performing real estate sectors right now are industrial, apartments and a “very hot” residential market.
There is some hope, however. Once the COVID-19 pandemic is over, whenever that is, the recovery could be quick.
“When restrictions begin being lifted (and sustained), we expect to see a rise in activity due to pent-up demand, as well as increased inventory in part due to some distressed properties coming to market as a result of vacancies and loss of rental income,” the report states. “As of now, there is an equal number of properties currently in escrow on our radar, which may push numbers higher in the third quarter.”
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