The Covid Effect: Small Commercial Property Deals Fall Nearly 50% in North Jersey

There is plenty of information being written about the effect of Covid-19 on commercial real estate sales, but most of it pertains to large transactions; Small transactions, those that are primarily under $1 million dollars, tend to fly under the radar because the principals are relatively small players. Another reason is that sellers and buyers find one another via MLS services, not large commercial sites like CoStar. Such is the case in North Jersey, where the Garden State MLS is a reliable source of sale information for small commercial transactions..

So, with Covid-19 in mind,  I set about to compare commercial sales in 2020 with those in 2019 over like periods of time…specifically March 1st – August 31st. I selected March 1st as the opening date because by then the gravity of the crisis was starting to be appreciated. The end date was when I ran the numbers and it was also my birthday. The data, as you can see below, also included 6 Northern New Jersey Counties.

Overall the number of transactions was down 47%. On an individual county basis, Passaic county took the biggest hit (-65%) followed by Essex, which declined 58%. Bergen County actually increased by 80%, but the numbers are too small to imply any meaningful trend. From the point of view of average sale prices, 4 of the 6 counties posted increases, which could be accounted for by buyers chasing unusually thin inventories. It could also be that averages can easily be skewed by a few extra deals at either the low or high end of the range. What isn’t a question, though, is that there are fewer small commercial properties on the market and there are fewer buyers willing to by them.

Give me a call if you want to share thoughts about the data or if you want to buy or sell something (973-865-1863).

 

 



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