Commercial activity has been mixed during the first quarter, according to Altus Group Ltd.’s quarterly report on CRE investment and transactions. The firm described the market activity as "generally subdued," although pricing trended higher and multifamily and office drew more capital than a year ago.
The average price per square foot on transacted single properties inched up by 0.1% quarter over quarter, with increases across all sectors except for industrial, which fell by 4.6%. The average price per square foot of a single property multifamily remains 20% below the fourth-quarter 2022 peak, while the price per square foot of a single property office transaction is down 17% from its Q4 2019 peak, according to Altus.
On an annual basis, the average price per square foot on single properties transacted increased 2.6% across all property sectors. Hospitality price per square foot increased the most at 14.8%, followed by retail at 5.2%, multifamily at 3.9% and office at 3.5%. However, price per square foot fell by 0.1% and commercial general and mixed use fell by 0.2% year-over-year.
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Eight of 15 subsectors recorded quarter-over-quarter price growth, led by full-service hotels, up 7.1%, bars and restaurants, increasing by 5.9% and general office, up 5.5%.
The median square footage of individual properties transacted during the first quarter increased 5.1% on an annual basis for industrial and 0.9% for office but retail fell by 0.6%, multifamily went down by 1.4%, hospitality plunged by 4.3% and commercial general and mixed use plummeted by 8.9%. The median value of a single-property transaction increased for all sectors year-over-year, led by office, which is up 25.2%, industrial, which is up 14.1% and retail, which is up 8.8%.
The number of single properties transacted fell to about 29,000, which tracks closely with similar trends in 2014. Total single-property transactions reached $61.4 billion, about 4% below the same period last year, said Altus.
The firm said, about one in six industrial properties transacted during the first quarter were part of a multiproperty sale, which is down both on a quarterly and annual basis. The share of hospitality properties transacted as part of a multiproperty sale fell nearly eight percentage points quarter-over-quarter to 5.5%, the lowest share since 2014, said Altus.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
