A slowdown in portfolio transactions is weighing on commercial real estate sales this year, according to Colliers, citing MSCI data through August. The dynamic mirrors the Pareto principle, where a small segment of activity can drive the majority of results. In real estate markets, those big-ticket portfolio and entity deals—the 20% of transactions that typically generate 80% of overall volume—have been largely absent, reshaping the investment landscape.
Aaron Jodka, writing for Colliers using MSCI’s August figures, noted that deal flow has shifted toward single-asset trades, particularly among midcap properties, as investors seek clearer pricing and more accessible financing. That aligns with LightBox’s findings earlier this year that more capital is flowing to mid-sized assets, a trend that inherently sidelines many portfolio transactions.
The shift has had a measurable impact on overall performance. Headline sales data showed an 8% year-over-year decline in dollar volume, as of August, even though single-asset trades rose 6% over the same period. Without price growth, which averaged a 2% increase across property types, the drop in transaction volume would have been more pronounced.
By category, office was the lone sector posting growth in deal volume, rising 17% to $6 billion with a 3% gain in pricing—a sign Colliers suggests could mark the start of a recovery cycle. Highlighting that momentum was the $1.08 billion purchase of 590 Madison Avenue in Manhattan by RXR, Elliott Management, and Baupost, the first billion-dollar single-building sale since 2022 that was not a partial interest transaction.
Industrial volume reached $7.4 billion, reflecting a 15% year-over-year drop for August, though prices climbed 5%. On a year-to-date basis, however, industrial sales are up 10%. The largest trade was Terreno Realty’s $427 million acquisition of a four-property portfolio from Blackstone, while Artemis Real Estate Partners bought six industrial assets from Beacon Partners for $344 million.
Multifamily sales totaled $12.5 billion, down 8% year-over-year with flat pricing, largely due to the same shortage of large-scale portfolio transactions. Single-asset trades, however, were up 11%. Notable deals included Naftali Group’s $810 million acquisition of 800 Fifth Avenue in Manhattan and AvalonBay’s $447 million sale of a 1,248-unit Washington, D.C., portfolio across four properties.
Retail posted an 11% decline in deal volume to $4.7 billion, though prices advanced 5.3%. Major transactions included ECA Capital’s $400 million sale of 342 N. Rodeo Drive in Beverly Hills and Bain Capital with 11 North Partners acquiring a 10-property, 1.1 million-square-foot portfolio from PGIM for $395 million.
Hospitality experienced the steepest drop, with volume plunging 27% to $2 billion. Colliers reported portfolio and entity trades in the sector collapsed 94%, while single-asset sales jumped 44%. Pricing was up 4.5%. Significant deals included Montgomery Street’s $215 million purchase of the leased fee interest in the Hyatt Regency Honolulu and Seafront Holding Group’s $145 million acquisition of the 361-room Marriott Seattle Waterfront.
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