July has seen a 10% year-over-year decrease in property sales across major asset classes, with investors acquiring $26.5 billion during the month. This is the second straight month of lower volume, according to a Colliers analysis written by research director Aaron Jodka.
Retail was the only asset class that logged notable sales gains in last month, with $4.4 billion in sales, a 22% year-over-year volume increase and a 4.2% year-over-year price increase. Single-asset and portfolio deals both posted gains in July, said Colliers. Notable deals included Federal Realty’s acquisition of two properties in Leawood, Kansas, for $289 million. Brixmor bought LaCenterra at Cinco Ranch in Houston for $223 million; Regency Centers and CBL were also active, said the report.
Multifamily was marginally positive at 1% growth, reaching $10.6 billion in volume. Colliers noted retroactive revisions suggest stronger conditions in the sector than initially reported. Portfolio activity increased 11% in July, which the firm highlighted as a positive sign of improving market conditions.
The largest multifamily deal of the month was Fairfield Residential’s purchase of nearly 1,600 units in the Phoenix metro area from Sunroad Enterprises for $462.4 million. Another notable deal was the $345 million sale of 180 Water in New York, which used to be an office property, in a partial interest transfer.
All other asset classes declined in sales volume in July, according to the analysis.
Office was down 16% at $3.8 billion after 12 months of year-over-year gains. The decline was largely driven by a lack of central business district (CBD) sales, which dropped 44%. Single-asset deals, on the other hand, were up 2%, which Colliers said suggests means July’s dip was an anomaly. The largest deal of the month was Cousins Properties’ acquisition of The Link at Uptown in Dallas. The property traded at $747 per square foot, one of the highest prices recorded for a Dallas office building.
Industrial sales volume dropped 22% to $6.7 billion in July, with both single-asset trades and portfolio deals down year-over-year. Pricing is accelerating, however. Crow Holdings sold 6 million square feet to Blackstone for $718 million, while retaining a small interest. Meanwhile, Mapletree sold two portfolios of 1.9 million and 1.8 million square feet, respectively, for a total of $569 million.
Finally, hospitality sales were down 52% to $1 billion, the largest pullback of the major asset classes. Pricing improved 2.4%. No large-scale transactions closed in July, leaving the market to be supported by single-asset deals. The most notable was the sale of The Belmond El Encanto and Garden Villas in Santa Barbara for $82 million, or $900,000 per key. The 92-room property is scheduled to undergo a renovation.
Overall CRE sales volume was $26.5 billion, down 10% year-over-year. Outside of the traditional asset classes, data centers reached $1.3 billion in deals, noted Colliers.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.