Commercial property sales volume declines in February

Commercial property sales are down in February.

While February can be a difficult month for commercial real estate sales, this year was particularly slow, and this may be a cause for concern, according to a report from CoStar.

There was approximately $9.2 billion in commercial sales during the month of February, which was significantly lower than February 2011's figure of $11.3 billion. Much of this could be due to investment in secondary, less expensive markets, according to the report. In addition, there could be an increasing gap between buyers and sellers regarding pricing expectations.

Furthermore, commercial real estate companies have witnessed more properties stay on the market for longer, the report said. In January, the average time on the market was 420 days, much higher than the same point in 2007.

"It has grown from around 250 days since 2007 to a record high of over 400 days, suggesting a high level of inefficiency and friction in the process of matching potential buyers and sellers," said Ruijue Peng, chief research officer for CoStar Group's PPR.

Continued high inventory levels may encourage prices to decline again and could result in a sales surge.

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