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Investment sales in November were dominated by sharp declines in some asset classes, according to a Colliers compilation using data from MSCI.
Aaron Jocka, the firm’s director of U.S. capital markets research, wrote that retail was the strongest performer, down just 10% month over month.
Office generated just $2.8 billion in sales, setting a monthly record for 2023. This is 54% off last year. Colliers said there were very few transactions in CBD real estate.
“The distress is visible, with multiple properties selling for less than $100 per square foot,” Jodka said.
Colliers reported that November’s largest sale was the $185 million joint venture purchase of Borough Plaza in Lower Merion, Pennsylvania. The maximum underwriting interest rate for this transaction was 7.7%.
In the industrial sector, you have to go back to February 2014 to find lower total sales. Colliers estimated the amount at $3 billion, with volume down 52% compared to October. The market was driven by small portfolio transactions.
The largest transaction was a seven-property portfolio in Dallas-Fort Worth, where Rockpoint paid $142.5 million for 1.4 million square feet of space.
Multifamily households also “didn’t have a strong month,” Colliers reported. Sales volume was down 68% year-on-year and 38% month-on-month. It was newer assets that drove most deals.
Recently delivered properties (2022 or 2023) have been traded in Atlanta, Charlotte, Oviedo, Florida, and Glendale, Arizona. The Atlanta assets sold for $444,118 per unit at a 5.5% cap rate. Properties in Santa Maria, Calif., built in 2020 traded at a cap rate of 6%, according to the report.
Retail value for the year was down just 32%, with $3.4 billion in transactions in November.
The biggest deal this month was Wells Fargo’s acquisition of the former Neiman Marcus in New York’s Hudson Yards for $321.7 million, or $804 per square foot.
“Previously reported sale price was $550 million, but Wells Fargo plans to use the space for office space,” Jodka wrote.
Hospitality in November was $1.3 billion, or 69% lower than a year ago.
Jodka said the number of properties for sale was “reminiscent of pandemic-era activity” and sales volume was also down 20% from October.
The only property to surpass the $100 million mark in November was the 196-room Hilton Brooklyn New York, which sold for $105 million, or $535,714 per room. Ohana Real Estate Investors acquired the property from Frank Inc.
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