Mortgage rates matter, but they don't seem to be the issue in the current commercial real estate market in Connecticut. Rather, as is also true in the residential arena, there just isn't enough supply of certain property types. Who knew twenty years ago that office space would go begging, while industrial space would be like gold?
Pandemic and the Supply Chain
COVID did a number on the need for formal offices, although they will come back to some degree, over time. What the pandemic has also done is to slow down the whole supply chain, so that construction prices and lead times have both gone way up. Manufacturers who held off during the past couple of years are now looking at a shocking rise in building costs. Lack of labor is further impacting delivery dates for new or renovated square footage. Construction firms, who can only pass along a part of the increase in prices, since they are bound by earlier bids, are seeing shrinking margins, and are therefore not in a position to gamble on projects on which they might not see any profit.
All of that makes existing property more valuable. Even buildings that can be retrofitted are of interest to users. They are also competing with investors, who still have money to deploy, especially in light of any bear stock market.
Good News for Sellers
Now is your time! Remember that the biggest mistake most people make in selling their own property is, somewhat surprisingly, underpricing it. Don't skip the professional Realtor. S/he will be worth the cost.
