IRVINE, CA—Auction.com racked up an impressive $121 million in online real estate auction sales during the month of June. The marketplace reports closing 42 commercial assets last month, ending the first half of the year strongly.
Most of the sales in June came from office properties. Data from the Metro Economy and Property Ratings for Summer 2014 from Auction.com Research points to recovery within that sector, which faced a steep decline during the recession. Total office employment is up 2.4% over the past year, a contributing factor to the office-property vacancy and rent improvements seen in past quarters and a likely cause of the heightened office-property transactions noted in this month’s report.
Among the closings during the month were:
- The L’Opera Building, a 65,540-square-foot office property in Long Beach, CA
- Jemison Flats, a 58-unnit multifamily property in Birmingham, AL
- A 72,216-square-foot office space in Los Angeles
- Country Inn & Suites Charlotte, a 100-key, select-service hotel in Charlotte, NC
- A 76,072-square-foot Downtown Los Angeles retail building occupied by Ross Dress for Less
- Golden Triangle I and II, a 244,359-square-foot office property in Greenbelt, MD
According to Rick Sharga, EVP at Auction.com, “Though the office sector is still lagging behind other property types, the recent growth in employment seems to have spurred some improvement in office rents and vacancies—even causing a slight uptick in property values. This is a trend we expect to see continue as employment levels improve, since the increasing likelihood of keeping an office building fully rented is key to investors who are adding to their portfolios in the current low interest-rate environment.”
Peter Muoio, senior associate and economist with Auction.com, tells GlobeSt.com he sees as the defining trend in the office, retail and industrial sectors as an overarching view of a strengthening economy. “We’ve had solid employment statistics recently—the country has added almost 250,000 jobs per month over the past five months, which is the strongest rate of growth in the recovery so far. Uncertainty has declined, too—there’s a measure of uncertainty we look at that has been super high for the past five years (taxes, political, regulatory, etc.), and as those uncertainties have started to fade into the background, consumers and businesses feel they’re on firmer footing, which brings spending.”
As Muoio recently told GlobeSt.com, technology is causing office footprints to shrink, and yet tech companies are among the country’s strongest office occupiers. This dichotomy is creating some interesting dynamics in the sector nationwide.