Investment in the office market is returning to normal. July’s $10 billion in transactions is just 9% below 2019 levels. Larger transactions are starting to become more common, with 11 valued at more than $200 million in the month. In the largest deal, a partial interest in the Daily News Building in Manhattan was sold for $790 million to Meritz Financial Group by SL Green. Brookfield Asset Management acquired WashREIT’s 12 DC-area office assets for $766 million. Meanwhile, on the West Coast, KKR continued its buying streak in the Bay Area, acquiring HQ@First in San Jose, with 60,000 square feet of lab space, from Mori Trust.


July sales volume moved slightly ahead of 2019 levels, at $7.5 billion. Portfolio deals drove sales, including a 48-property portfolio Prologis sold to Black Creek for $920 million. International capital is actively buying industrial space; Mapletree Investments acquired a 23-property portfolio from a JV between ADIA, PSP Investments, and Exeter for $475 million, and MRP Industrial purchased a 43-property portfolio in Pennsylvania from Gambone Development for $210 million.


After near-record monthly sales in June, volume normalized in July. Overall, $13.7 billion traded, which was 14% below the same month in 2019 but broadly in line with 2018 levels. Liquidity isn’t a problem for multifamily, with numerous deals over $100 million in the month. Pricing continues to push higher, with the best growth over the past year and units trading at all-time highs, topping $200,000/unit on average for the first time. The largest deal of the month, a 60-property portfolio in Manhattan, sold for $400 million. AB & Sons Group purchased a 50% interest in the assets from Black Spruce Properties. In Boston, KKR purchased NEMA Boston, built in 2018, for $332 million. The per-unit pricing of $802,000 was among the highest for a multifamily asset in Boston history.


Investment in retail continues in fits and starts. Month-to-month and July-to-July 2019 figures were both down over 40%. Major transactions were scarce, weighing on overall volume. A joint venture between Medipower and Paramount Realty Services acquired a six-property portfolio from Brandolini Co. in Pennsylvania and New Jersey for $114 million. Two Massachusetts assets sold to RPT Realty in separate transactions. The largest, Village Shoppes in Canton, sold for $61.5 million, while Bedford Marketplace traded for $53.8 million. Elsewhere, CMK sold a 35-property portfolio of Dollar Generals to Realty Income Corp. for $61.5 million.


After a banner June, hotel volume was sure to revert to historical norms, with no entity-level transactions in the month to drive billions of dollars in sales. In the largest deal of the month by number of rooms, Apple Hospitality REIT sold 20 properties with 2,100 rooms to a joint venture of Flynn Properties and Varde Partners for $210 million. In San Francisco, the Le Meridien sold for $221.5 million, at a reported 5.9% cap rate on the previous year’s income. Meanwhile, Baker’s Cay Resort in Key Largo Florida traded for $200 million ($1 million per room), at a 6.2% cap rate.