Increased Optimism: NAI Beverly-Hanks Year End 2020 Commercial Market Report

Commercial Real Estate Forecast

The commercial real estate market is currently in a relatively stable state, given the effects of 2020 on key sectors. Despite a brutal drop in tourism in Western North Carolina and related blows to small businesses dependent on those tourist-fueled door swings, annual gross rents dropped by only 1.3%. According to CoStar, the vacancy rate is trending “upward slightly after several consecutive quarters of negative net absorption,” indicative of a potential long road on the horizon for the industry.

Future predictions are delineated drastically by sector. Office, multi-family, and retail sectors continue to indicate a slow recovery model. However, industrial and alternative sectors geared towards e-commerce, warehouse space, and data centers are performing relatively well, as exemplified by investor sentiment and transaction reports. Optimism is growing for industry leaders, as relayed by Real Estate Roundtable President and CEO, Jeffrey DeBoer. He explains, “Overall, industry low leverage, general market balance, and functioning capital markets are positive influences that—when coupled with growing good news regarding vaccines—result in increased optimism.”

Some concern lingers for the commercial real estate market, specifically by the Federal Reserve. The industry was singled out as showing signs of weakness by the most recent Financial Stability Report. Reports suggest that a fallout effect may come into play for property owners and lenders as a result of 2020’s financial aid and relief. Buyers will find this opportunity advantageous as they negotiate price points and lease terms.

Nevertheless, resilience will be the key to success in 2021. The first quarter is expected to follow the path of 2020’s fourth quarter, but hope is on the horizon in the spring as the pandemic weakens with the vaccine distribution and our local tourism economy is revived.


2020 Commercial Activity Review:

  • 24 Industrial Transactions for $31.4 million
  • 57 Office Transactions for $44.9 million
  • 120 Retail Transactions for $155 million
  • 31 Multi-family Transactions for $118 million
  • 149 Land Transactions for $90.2 million

2020 Lease Activity Review:

  • 59 Industrial Lease Transactions, Vacancy Rate of 4.2%
  • 111 Office Lease Transactions, Vacancy Rate of 3.2%
  • 145 Retail Lease Transactions, Vacancy Rate of 2.5%

All data that we share is for the four county MSA (Buncombe, Henderson, Haywood, and Madison) and is provided by CoStar. 


Download a PDF of the report.

All real estate is local. In order to make confident real estate decisions, we believe it is important for you to have timely and neighborhood-specific information. For more information about our commercial real estate market, ask your NAI Beverly-Hanks agent or click here.

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