Monday Morning Scoop - Investment Sales Jump 20% After Weak Summer

Investment Sales Jump 20% After Weak Summer

August offered a hopeful sign that CRE sales in the U.S. could be on the upswing, but the market still has a way to go before it recovers fully, and deals over $100 million are scarce, according to Colliers Capital Markets August update.

After a weak June and July, sales jumped 20% in August to $23.5 billion. But on an annual basis, the market was down 61% compared to the prior year, and prices were lower as well – with the exception of hospitality, which improved by 1%.

By sales volume, multifamily led all other asset classes, recording deals worth $8.2 billion. That was 74% less volume than August 2022 but 21% higher than July this year. The sector was also unusual in scoring several trades exceeding $100 million, “revealing continued liquidity in the multifamily market,” Colliers noted. Top billing went to the $372 million purchase by Bridge Investment Group of a six-property portfolio in Massachusetts from Harbor Group International with 1,722 units.

Industrial volume similarly rose to $6.5 billion, a 21% month-over-month gain, though 30% below the prior year. The biggest trade was the $1 billion sale of a 3.5 million SF portfolio in the Inland Empire to Westcore Properties by BentallGreenOak and MEPT. Colliers also cited a sale-leaseback deal by which Blue Owl Capital acquired a Big Lots California distribution center and 26 stores for gross proceeds of $318 million.

“Retail volume grew the most of any asset class in August, up 36% compared to July. With $4.2 billion traded, it marks one of the year’s strongest months,” Colliers reported. Sales volume reached $4.2 billion, 45% below the prior year. Big deals included the $1.4 billion acquisition of Urstadt Biddle Properties by Regency Centers and the $172.5 million purchase of Stonebridge at Potomac Town Center by Kimco.

Hospitality sales volume rose 15% from July to August to $1.8 billion. That achievement was helped by the $622.9 million sale of the 631-room Park Lane Hotel in New York City to the Qatar Investment Authority. “Recent changes to short-term rentals in New York have resulted in a pop to RevPar,” Colliers stated.

Even the office sector enjoyed a slight boost in sales, increasing to $2.9 billion, though it remains “the most out of favor.” Among the biggest deals were the sales of the 400,000 SF Medtronic Campus in Lafayette, CO for $188 million and the 220,000 SF Pen Factory in Santa Monica for $166 million.

By: Philippa Maister
Source: GlobeStreet