The Unseen Market: The Pervasive Role of Off-Market Transactions in Commercial Real Estate
A significant, though largely unquantifiable, proportion of commercial real estate transactions occur outside the public eye…
Although no definitive dataset exists to quantify off-market activity… (rest of your text continues here)
Why Off-Market Transactions Proliferate
- Discretion and Confidentiality: Sellers often prefer to avoid public exposure…
- Market Testing: A private offering enables owners to gauge buyer interest…
The Shadow Leasing Market
- Lease Renewals: The majority of renewals are negotiated directly…
Variability Across Asset Classes and Markets
The prevalence of off-market activity is not uniform…
Estimating the Off-Market Share: Sales and Leasing
Though a precise quantification is unattainable…
Commercial Sales: 25% to 40% Off-Market
- Upper Bound (40%): Applies to high-value…
- Lower Bound (25%): More representative of mid- to lower-tier assets…
Commercial Rentals: 40% to 60% Off-Market
- Lease Renewals: According to CBRE’s September 2024 report…
Why No Single Number Can Suffice
- Asset Class Specificity: Industrial and multifamily sectors…
Conclusion
Despite the absence of precise, centralized reporting…
Sales: 25% to 40% of all commercial transactions
Rentals: 40% to 60% of leasing activity
In a market defined as much by relationships and discretion as by data and transparency…