Leasing Commercial: The Growing Trend

The last three or four years have witnessed unprecidented foreclosures, homeowners underwater, a need for rental properties that may well be the next real estate bubble. Residential properties seem on the upswing, that’s for sure. But what about the commercial end of the market? A home is one thing, businesses needing growing space, that’s quite another.

From rental properties to commercial space for sale, the real estate market has experienced quite a bit of turmoil lately. However, recent trends in leasing prices suggest the worst may be behind us, and could foreshadow a positive move in sale prices. Taking a look at these trends will help you when it comes time to decide whether to buy or lease commercial property to use as an investment. You can also see where the higher and lower cost markets are located for each option. Take a look at the infographic below.

Created by LoopNet Rental Properties

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Following the profit end of trends in real estate, it’s easy to see residential and commercial rental properties taking off while new construction at either end remains sluggish. The reason? Banks and interest rates, not to mention new construction loan curtailments. The bottom line, as suggested in this MarketWatch article about the Virtus Real Estate Fund, is that no new space equals a boom for some. Whether people are in search of places to live, store their excess furniture, or businesses need expansion space – a lot of properties have been soaked up by investors. Supply is not just about square feet, it is often about who owns it too.

Marketing and managing commercial space makes a difference, but not nearly as much as the general trend for larger entities to control segments. Still other movement shows entrenched lending entities even venturing out to get in the game. Clopton Capital straight out purchased a new development, a multifamily opportunity in Logan Square in Chicago. For the rental niche, it sure looks like the market may indeed turn. After all, there’s no place left to go but up, or so they say.

Property photo courtesy © Mark Richardson – Fotolia.com


  1. Gregory Tzucanow says

    South Florida RE market (Miami) not represented on commerical space lease/sale? Pretty dynamic area to ignore?


  2. I was unaware that San Jose was south of Los Angeles and north of San Diego! Hopefully the rest of the facts are all accurate.

  3. FYI – The graph shows San Jose south of Los Angeles…it is not in the right location.


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  4. […] space Loopnet put together a very good info-graphic (below) on leasing vs. buying trends in commercial real […]