Declines – significant in some asset classes – dominated investment sales in November per a recap by Colliers that used MSCI data.
Retail performed the best with just a 10% decline month over month, wrote Aaron Jodka, Research Director for U.S. Capital Markets, for the firm.
Office established a new monthly low for 2023 with just $2.8 billion in sales volume. That’s off 54% from last year. Very few CBD properties traded, Colliers said.
“Distress is visible, with multiple properties selling for less than $100 per square foot,” according to Jodka.
Colliers reported that the largest sale of November was a joint venture purchase of the Bala Plaza in Lower Merion, Penn., for $185 million. The underwritten cap rate on the deal was 7.7%.
In Industrial, you have to go back to February 2014 to find a lower total sales figure. Colliers pegged it at $3 billion, with volume declining 52% over October. Smaller portfolio deals drove the market, it said.
The largest deal was a seven-property portfolio in Dallas-Fort Worth, in which Rockpoint paid $142.5 million for 1.4 million square feet of space.
Multifamily was “not a strong month” either, Colliers reported. Sales volume was off 68% compared to last year and fell 38% month-over-month. Newer assets were what drove most deals.
Recently delivered properties (2022 or 2023) in Atlanta, Charlotte, Oviedo, FL, and Glendale, AZ, were traded. The Atlanta asset sold for $444,118 per unit at a 5.5% cap rate. A 2020-built Santa Maria, CA, property transacted at a 6% cap rate, according to the report.
Retail volume on the year is off only 32%, with $3.4 billion trading in November.
The largest transaction of the 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.
“Previous reports had the sale price at $550 million and Wells Fargo plans to use the space as an office,” Jodka wrote.
Hospitality for November came in at $1.3 billion or 69% less than a year ago.
Volume also declined 20% from October with the number of properties sold “reminiscent of pandemic-era activity,” according to Jodka.
The only property to cross the $100 million mark in November was the 196-room Hilton Brooklyn New York, which traded for $105 million, or $535,714 per room. Ohana Real Estate Investors acquired the property from Frank Inc.