With November behind us, we can see how the average price per square foot for last month performed against the same time frame the previous year.
The average price per square foot in November 2023 was $1.20, which is a 29% decrease YoY when compared to November 2022, which was an average price per square foot of $1.68. What is notable is that this is also a decrease from the average price per square foot of November 2019, which was $1.21.
It is important to note that the drop in asking rates signals more of a shift in the REITs pricing strategy rather than a true indicator of demand. This is done to drive physical occupancy through the allure of an initial promo rate.
However- as I talked about in last week's article here. This pricing strategy has created a higher barrier to entry for development as well, slowing down new supply in a lot of markets.
*Average price per square foot data based on 10x10CC REIT data within the top 25 markets