Record sales volume was recorded in Q3, per Real Capital Analytics’ latest figures, toppling the previous quarterly record of $170.5 billion in Q4 2019. A total of $179.4 billion traded in Q3. Multifamily, with $78.7 billion in quarterly volume, also set records, while office, industrial, and retail all posted quarter-over-quarter gains. In total, volume is up 161% over the past year and 18% above 2019 figures. At its current sales pace, 2021 will set a new volume record.


After a slower recovery than for other property types, office volumes are back to normal. Q3 volume of $34.8 billion is in line with the quarterly average from 2015–19. Investors are taking on more risk, willing to purchase assets with impending lease roll or in need of redevelopment. Case in point: the largest deal in September was a two-property sale in San Francisco, where PG&E sold 77 Beal Street and 245 Market Street to a joint venture of Hines and NPS for $800 million. Deals in the Washington, D.C., area, including the district and Virginia, also closed in September, returning volume to another core market where it had fallen.


Industrial volume continues to outpace that of office, which has only happened once before, in 2020. Quarterly sales of $39.5 billion rank as the third-highest quarterly total on record. Investors cannot get enough of the industrial asset class. Cap rate compression continues, with 3% (and lower) deals becoming more common. In September, a newly built Target distribution facility in Swedesboro, NJ, sold to Torchlight Investors for a reported 3% cap rate. The 1.1 million square foot facility traded for $265 million, or $239 per square foot. Portfolio volume is on the upswing, adding even more liquidity to the already red-hot industrial market.


Never has there been more investment in multifamily than today. The Q3 volume of $78.7 billion was an all-time high, shattering the previous high-water mark of $63.4 billion in Q4 2020. Remarkable rent growth, healthy occupancies, and rising costs of single-family homes have made multifamily an investor favorite. Year-to-date, more than 40% of all commercial real estate sales volume has gone to multifamily. The largest deals in September followed the trend of investment in growth corridors in the Southeast and Southwest. Bell Partners sold a 12-property portfolio of 3,037 units to BREIT for $809.2 million, and 11 were in the Southeast or Southwest.


Retail topped $17 billion for the first time since 2019 in Q4. Shopping centers are beginning to trade more frequently, adding a missing piece to the investment sales market. Grocery-anchored centers remain a hot commodity, and the largest deal in September was a 25-property grocery portfolio sold by Annaly Capital to Slate Grocery REIT. The properties sold for $390 million and covered 3.1 million square feet. Alamo Ranch in San Antonio, TX, Evergreen Park in Evergreen Park, IL, and The Factory at Franklin, in Franklin, TN, all traded, for between $224 per square foot to $263 per square foot. La Encantada in Tucson, AZ, which features an Apple Store as an anchor, traded for $699 per square foot.


Hotel sales have been volatile due to major transactions such as the acquisition of Extended Stay America, making quarter-to-quarter comparisons jumpy. Overall, $9 billion traded in Q3, the second-strongest showing since the outset of the pandemic. Higher-priced deals are becoming more common, as the recovery in hotel fundamentals has spread across market segments. In the largest deal of September, Pebblebrook Hotel Trust acquired the 369-room Margaritaville Hollywood Beach Resort in Hollywood, FL, for $270 million. Also sold was a three-property portfolio in The Woodlands, TX, for $252 million for 909 rooms. Midscale to luxury properties are trading more regularly, indicating increased liquidity.