Improvements in the Sacramento commercial real estate market could boost jobs
Potential homebuyers may not always consider the strength of the local commercial real estate market before purchasing a property. However, researching the presence of local businesses, the rise and fall of employment in local industries and other related topics can give a person a strong indication of the state of the local economy.
According to the Building Owners and Managers Association (BOMA) annual report titled, “Experience Exchange Report,” the recent market growth in the past year has allowed commercial property owners to increase their incomes while decreasing their expenses. The average total rental income earned per square foot for a commercial property has increased by $1.56, while operating costs have dropped by $0.20 per square foot in the past twelve months.
"These findings demonstrate improving conditions in commercial real estate markets over the past four years," said BOMA International Chair Joseph W. Markling. "Much of this recovery has been aided by the innovative ways that building owners and property managers have found to decrease expenses - particularly energy costs - through dedication to sustainable practices and maximize value via benchmarking tools like the Experience Exchange Report. Overall, we remain optimistic about the future of the commercial real estate industry."
The improving state of the commercial real estate industry has allowed more businesses to move into metros with strengthening local economies such as Sacramento. For example, K Street, in Downtown Sacramento, is no longer a barren landscape of empty retail spaces. The Sacramento Bee reports that every storefront on the thoroughfare from Ninth Street to the Convention Center is currently filled or about to be.
In the 12 months preceeding September 2012, approximately 19 businesses moved into the K Street area. The companies ranged from restaurants and hotels to bars and art galleries, according to the news source.
Continue to check out the state of the commercial real estate in Sacramento to determine if the metro offers an improving local economy. The growing presence of small and medium businesses in a region could indicate that the area’s experiencing an uptick in hiring and improving its gross domestic product rate.
An improving commercial real estate market will help indicate a strengthening economy to potential homebuyers.