"The availability of class-A buildings has kind of gone away at the price the buyer wants to pay," owner George Roddy Sr. tells GlobeSt.com. The decline also could be an indicator that high-profile properties simply aren't for sale in today's market.

Last year, the office per sf average price had come in at $96.64 in comparison to $112.50 per sf in 1999. In comparison, it had been $52.33 per sf in 1996; $63.17 per sf in 1997; and $77.84 per sf in 1998.

Roddy says the decline isn't really a major concern because 2000's average selling price remains ahead of 1998. In 1998-99, a high number of class-A holdings had changed hands and subsequently affected those years' average selling prices. Now, buyers "are being forced to take what they can get," he says. Had the decline reached 25%, then there would be a red flag, he explains.

The multifamily sector is another story, where average selling prices per unit had hit $33,790 in year 2000. That is up $12,781 per unit over 1996's average per unit price. Multifamily average prices had been $24,047 per unit in 1997; $27,093 per unit in 1998; and $27,850 per unit in 1999.

That multifamily average price inflation, says Roddy, is due to owners hawking properties they had acquired in the depressed market of the early 1990s. Sales are ringing up 10% to 14% returns on original investments. "As the fear of overbuilding apartments comes upon us, some have decided to sell off these better buildings," he assesses of the situation. For years, he says class-A multifamily holdings simply didn't come to market.

"The real stability," Roddy says, "appears in industrial and retail." Industrial buildings in 1996 had sold for an average of $23 per sf. Last year, properties had fetched $31.90 per sf on the average. Roddy's annual tracking shows the 1997 industrial average had been $25.87 per sf; $32.81 per sf in 1998; and $30.36 per sf in 1999.

In the retail sector, last year had brought in $86.67 per sf in comparison to $83.54 per sf in 1999. In 1996, retail properties had average selling prices of $50.50 per sf; $69.01 per sf in 1997; and $83.83 per sf in 1998.

Roddy tells GlobeSt.com that he doesn't see this year as bringing any significant increases or decreases in values. The market might slow, but that's to be expected given today's economy as he predicts returns to stay the course between 9% and 12% for sellers. And, he says, a horizontal growth period might actually be good because the upward cycle is sure to jumpstart once again. That, he forecasts, will come in late this year or early next.

Instant Insights /

Roddy Releases Average Selling Prices Report

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