The market is not as grim as many imagine, Welsh tells GlobeSt.com. There remains a great deal of money from a variety of sources chasing few properties, he says.
His data shows that apartments with more than 100 units led the investment activity last year. Investors paid $636.9 billion for 26 communities, at an average price of $79,130 per unit and an average cap rate of 8.24%. That compared with $458.355 million in apartment sales in 2001, at an average price of $87,070 and an average cap rate of 8.83%.The office market was the only sector to fall in 2002 from 2001. Investors paid $350.36 million for 32 offices, at an average price of $108.17, and an average cap rate of 9.78%. That compares with $459.5 million in sales in 2001, at an average price of $116.60 per sf and an average cap rate of 10.13%.
Retail increased the most on a percentage basis. Last year, investors paid $497.157 million for 64 retail projects, at an average price of $122.71 psf, at an average cap rate of 9.61%. In 2001, investors paid $273.528 million for retail, at an average price of $119.11 per sf at an average cap rate of 9.78%.
For industrial, investors paid $247.864 million for 40 properties, at an average price per sf of $62.49, and an average cap rate in 9.4%. In 2001, investors paid $195.318 million for 36 industrial properties at an average cap rate of 9.9%.
Welsh tells GlobeSt. he thinks 2003 will surpass 2002 in dollar volume. The only problem is the reluctance of owners to sell.
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