The second quarter of 2024 saw commercial real estate sales volumes rise slightly over last year—but that improvement, according to an analysis from Colliers based on MSCI data, belied significant shifts from month to month and sector to sector.
According to Colliers' Director of National Capital Markets Research, Aaron Jodka, headline sales volume for the quarter increased 2% year-over-year, reaching more than $96.2 billion. Even so, June’s performance told a different story: deal volume fell 20% compared with the same month last year. This drop was primarily attributed to a lack of major portfolio or entity transactions, such as the $10 billion deal earlier in the year in which Blackstone took Apartment Income REIT, then called AIR Communities, private.
There remains uncertainty about June’s final numbers, as recent months have seen fluctuations and subsequent revisions, Jodka noted. “Deal counts, as opposed to dollar totals, continue to be muted,” he said, adding that the number of deals over the past 12 months is running just slightly ahead of the average seen in the disrupted 2020 market. Still, some investors appear optimistic, buoyed by a record-setting stock market even as questions remain about fiscal policy.
MSCI tracked activity across five commercial property types: office, industrial, multifamily, retail and hospitality, painting a nuanced picture of sector performance.
Multifamily assets recorded the highest sales volume in Q2 at $35.1 billion, though this figure was down 14% from a year earlier. The lack of large entity-level transactions dampened the numbers further, and there was no change in overall pricing. Dallas led the country in multifamily activity, posting $5.6 billion in deals.
Industrial properties followed, with $22.9 billion in transactions—a modest 1% increase year-over-year and a 2% rise in prices. Despite some quarter-over-quarter softness, year-to-date sales in the industrial sector outpaced this point in 2024. Cap rates have moved higher, which analysts at MSCI believe could draw investors back into the market. The Dallas region once again led in transaction volume, followed by Northern New Jersey, Houston, Las Vegas and Phoenix. Orange County, Raleigh-Durham, Salt Lake City, Nashville, the Virginia suburbs of Washington, D.C. and Savannah also reported brisk activity.
The office sector posted Q2 sales volumes of $18.1 billion—a 51% jump compared to last year’s unusually low figures, even as prices slipped 2%. Still, by 2019 standards, volumes remain only half what they once were. The biggest gains were concentrated in central business districts, up 74% year-over-year. Manhattan led the country in office investment volume for the first half of the year, followed by East Bay, Los Angeles, Houston and San Jose.
Retail was the fourth largest category, with $14.7 billion in transactions. Volume surged 30% from the previous year and prices rose by 4%. Despite a sequential dip from Q1 to Q2, single-asset retail deals grew 28%, and portfolio and entity deals expanded by 44%. The highest sector sales volumes were seen in Los Angeles, Seattle, Dallas, Manhattan and Phoenix.
Hospitality trailed with $5.5 billion in transactions, registering the biggest year-over-year decline of any sector at 26% and a 1% drop in prices. Portfolio and entity deals fell by a sharp 73%, while single-asset activity slipped 17%. Phoenix saw the highest hospitality volume, with Atlanta, Manhattan, Palm Beach County and Dallas rounding out the leading markets.
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