As we reflect on the dynamics of the commercial real estate market in 2023, it’s evident that various factors have shaped the landscape, presenting both challenges and opportunities for investors and stakeholders.

One notable trend was the decline in total sales transactions, plummeting from 32 to 10 throughout the year. This shift highlights the influence of a variety of factors such as financing costs, economic conditions, and supply and demand dynamics on market activity.

Despite the decrease in transaction volume, 2023 witnessed a modest increase of 2% in the price per unit compared to the previous year, due to increases in the rental rates. The average sales price per unit, adjusted for short-term rental housing, reached $198,224, indicating resilience in pricing despite the overall downturn in transactions.

In 2023, Santa Fe emerged as a hotspot for development, with a significant influx of apartment units. A total of 120 units were delivered, while an additional 1,788 units are currently under construction. Furthermore, a staggering 5,022 units have been approved for development, indicating robust growth prospects in the region.

Rental trends across different apartment sizes showcased a diverse range of price points. For instance, 1-bedroom apartment rents ranged from $1,280 to $2,100, with an average rent of $1,600. Meanwhile, 2-bedroom apartment rents were between $1,600 and $2,420, with an average rent of $2,000, highlighting variations in pricing based on unit size and amenities.

2023 marked a period of transition and adaptation within the commercial real estate market. The slowdown in sales transactions suggests a potential plateau in market activity, influenced by factors such as interest rates, property valuations, and financing costs. Despite challenges, Santa Fe’s development pipeline signals promising growth opportunities, while market-level rents have shown resilience, surpassing the national benchmark with a 0.9% increase.

As we move forward, staying informed about evolving market dynamics and leveraging insights into supply, demand, and pricing trends will be instrumental in navigating the commercial real estate landscape and seizing opportunities for success.