• Look Ahead in the Middle of the Year – 2021

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    Well, we are getting the question again as we start to venture out to networking events and public gatherings…Are you busy? How is the commercial market?

    We are constantly forecasting for the future and trying to get a glimpse of what the crystal ball holds.   The best way to do this is with the data that exists in the local market.  Granted it is gathered from multiple sources and sometimes taken with a grain of salt based on the source; however, many times it is consistent with our own opinions based on the activity we our office is generating in the market.

    Haedrich & Co., Inc. has been around since 1984 servicing the greater Redding area and is the longest running commercial brokerage company in the North state.  We help the Redding community with not only leasing and sales of commercial properties, but with all real estate questions and requirements.   The PRIMARY advantage of our office is our ability to provide the data to allow you to make an educated market decision.

    COVID threw a wrench in everyone’s business and there was an immediate shut down of interest in commercial real estate market.  We are now seeing a better year than pre-COVID for transactional volume.   CoStar News recently reported on July 29, 2021 that the “CBRE Group, the largest commercial real estate services provided, post second-quarter results that not only exceeded last year’s earnings during the pandemic but beat the second quarter of 2019 before the coronavirus slowed business activity around the globe.”  Per Shasta County Multiple Listing Service (“MLS”) Data for Commercial/Industrial Properties, the sales volume is on track to have the best year even surpassing the volume in 2005 (See graph below – 2021 is annualized).  


    Granted, it is near impossible to annualize year-to-date activity with real estate and it would appear there may be declining inventory on the horizon, which would most likely make any annualized data irrelevant.  There is a 32% reduction in active for sale listings of commercial properties currently in the MLS when compared to an average over the last several years at this same time.  We are seeing a 55% reduction in available spaces for lease from 2020 and there is minimal development of new available space in the market.  Tightening supply is on the horizon for both sale and lease.   However, Shasta County has not seen the recovery in the leasing market from pre-COVID levels.  Haedrich & Co., Inc. alone has seen a reduction of 35% below 2019 volume for leasing.  These are similar trends nation wide and as expressed by the CBRE Group per the article referenced earlier.  The unknown is the Delta Variant of COVID and how this will affect all markets across the globe.

    Even with this unknown of COVID, we anticipate the year to continue well for the greater Redding area and leasing to pick up to levels even higher then pre-COVID.  There most likely will be a decline in sale transactions primarily from the reduction in inventory.  This is attributed to the uncertainty of sellers not knowing where to invest the cash proceeds for a better return and holding real estate as a result of inflationary fears.  Hopefully, this will not hinder overall values that are still well below construction costs and affecting the feasibility of development (see new commercial construction starts below for the City of Redding).


    If you want to chat about commercial real estate give us a call, we always enjoy the friendly debate on what the crystal ball holds.  Our office continues to be the leader in marketing of commercial property in the Redding area with the most exposure to local, regional, and national areas.  In addition, our data driven analysis background provides the required support and expertise to reach any client’s goals.