• Investors allocated $22 billion to the major asset classes in April, down slightly from the previous year.
• When the dust settles, volume is likely to be up marginally, continuing the trend from the prior six months.
• Industrial and hospitality drove the month’s pullback, down 34% and 52%, respectively.
• Multifamily, up 20%, and office, up 15%, were the leaders. Retail increased by 6%.
• The uncertainty that jostled the markets in April will not be reflected in sales statistics until future months.

Colliers Insight

Share this with your followers

Office

Office volume of $3.9 billion grew 15% compared to last year, and over the past 12 months, the asset class is up 9%. CBD activity is increasing, with volume up 45% over the past year. Investors are seeing value in the office market again and are coming off the sidelines.

The largest single-asset deal of the month was Synergy’s purchase of 99 High Street in Boston for $227 million, or $310/SF. This trade marks another hometown acquisition for the investor. Other top deals were in Plano, TX; Washington, D.C.; Culver City, CA; San Francisco; Fort Mill, SC; Los Angeles; and Manhattan.

Industrial 

Industrial volume still tops that of office, but the gap narrowed in April. Volume was down 34% compared to last April but is up 14% over the past 12 months. Portfolio activity was the main contributor, off 61% in the month.

The largest single-asset deal took place in Santa Fe Springs, CA, where W.P. Carey REIT acquired UNFI Santa Fe for $140.3 million, or $463/SF. The asset includes various uses, including refrigeration. Blackstone was a seller in April, parting with two small portfolios in Florida and Nevada to Ares Management and Invesco, respectively.

Multifamily 

Sales volume has increased on a year-over-year basis for 11 consecutive months. Another $9.2 billion was invested in April, a 20% increase from last year. Over the past 12 months, volume has grown 41%. Portfolio activity drove April volume, as single-asset sales were down slightly.

PCCP acquired an 81-property, 1,808-unit portfolio in the Bay Area for $540.5 million from Veritas Investments and Ivanhoe Cambridge. In the Midwest, Morgan Properties bought 11 properties totaling 3,054 units for $501 million from Trilogy Real Estate Group. Other major deals took place in Plano, TX; Santa Ana, CA; Chicago; and Wood Ridge, NJ.

Retail 

Retail volume was up 6% in April, marking year-over-year sales gains in three consecutive months and eight of the past 12. The number of properties trading remains sluggish. An estimated 321 assets sold, the lowest monthly figure since the pandemic.

Key transactions in April included the retail portion of Legacy West in Plano, TX. The 344,000-SF center sold for an allocated price of $271.3 million to Kite Realty and GIC. Ralph Lauren acquired its storefront at 109 Prince Street in Manhattan for $132 million, or $13,300/SF. Meanwhile, Superstition Gateway Shopping Center, a 495,000-SF property in Mesa, AZ, sold to Alvarez & Marsal for $121 million.

Hospitality 

Weak velocity weighed on monthly sales volume. Fewer than 80 properties traded, marking a recent low. As a result, volume was down 52% from last April, with $1.1 billion in sales. April broke a four-month streak of year-over-year volume gains.

The largest deal of the month was the acquisition of Silver Sands Beach Resort in Key Biscayne, FL, by Terra Group and Fortune International. The 56-room property traded for $205 million, or nearly $3.7 million per room, and is slated for redevelopment. In Texas, Sixth Street Partners bought the 545-room Fairmont Dallas for $111 million, or $203,700/key, at a 10% cap rate.