CRE sales volume dropped in each of the top 25 U.S. markets in the first half of 2023.
In some cases, there were precipitous slumps from the same period a year earlier – 75% in Seattle, 73% in Orlando, 72% in Charlotte, 70% in Houston, and 69% in Atlanta. In other cases, the fall was less severe – 46% in San Francisco, 41% in Northern New Jersey, and 37% in Broward County, FL. "Deal volume in each market fell at double-digit rates in the first half of the year compared to the same period a year earlier," according to MSCI's Capital Trends report.
Some sales stood out. The $1.1 billion deal for the Port of Los Angeles Distribution Center, which accounted for almost one-third of the metro's total industrial volume, led the nation. It contributed to the $9.2 billion total sales achieved in Los Angeles – down 48% from the prior year. The industrial sector accounted for 41% of activity there while apartments accounted for 28%.
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Another landmark deal was scored in Manhattan with a partial interest deal for 245 Park Avenue. The sale of a 49.9% stake in the 1.7 million-square-foot office tower to Japanese developer Mori Trust hauled in $998 million. Sales of single assets dominated in Manhattan, with 14 individual property sales of more than $100 million each. The city achieved a total sales volume of $5.45 billion – a drop of 58% from the prior year – but still enough to land the Big Apple in 3rd place nationally.
Dallas lost its front-runner status to Los Angeles. It represented the second most active market with total sales of $8.1 billion – 68% below the prior year. More than half of sales volume was attributable to apartments, with one portfolio sale of 25 apartment assets accounting for 10% of total volume. Multifamily sales also constituted more than half of sales in Austin, Seattle and San Francisco.
Chicago, with sales of $5.3 billion, took fourth place, followed by Atlanta with $4.96 billion.
Distressed sales also played a role in some markets in the first half of the year, especially in Los Angeles, Houston, and Northern New Jersey.
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