Aaron Jodka
- Headline sales figures show an 8% volume decline year-over-year as of August.
- This is driven by a lack of portfolio and entity deals; single asset trades are up 6%.
- Office is the only asset class to post an increase compared to last year.
- Pricing is rebounding with gains shown across all major asset classes.
- Market sentiment has improved in recent months suggesting a strong close to 2025 is coming.
Office
Office volume of $6 billion was up 17% compared to last year. CBD sales rose 115%, while suburban asset sales pulled back. Pricing is showing signs of improvement, indicating the recovery cycle has begun.
The highlight of August was RXR, Elliott Management, and Baupost’s acquisition of 590 Madison Avenue in Manhattan for $1.08 billion. This marks the first billion-dollar single-asset sale since early 2022 that wasn’t a partial interest transaction. Other large deals traded in Phoenix, AZ; Santa Clara, CA; Birmingham, AL; Pasadena, CA; and San Francisco, CA.
Industrial
Industrial volume was off 15% compared to last year at $7.4 billion of sales. Year-to-date, however, industrial volume is up 10%. Price growth is among the strongest of all asset classes, up 5% since last August.
The largest deal of the month was Terreno Realty’s acquisition of a four-property portfolio from Blackstone for $427 million. The assets were spread between Florida, New Jersey, and Washington. Artemis Real Estate Partners acquired a six-property portfolio in Pineville, NC, from Beacon Partners for $344 million.
Multifamily
Multifamily investors allocated $12.5 billion to the asset class in August, an 8% decline from the prior year. This was largely the result of a lack of portfolio and entity deals. Single asset sales increased 11% since last August.
The largest deal of the month was the acquisition of 800 Fifth Avenue in Manhattan for $810 million. Naftali Group acquired the property with plans to build a condominium tower in its place. AvalonBay sold a four-property, 1,248-unit portfolio in Washington, D.C., for $447 million.
Retail
Retail volume declined 11% compared to last August, with $4.7 billion trading. Price gains have been the strongest of all asset classes, up 5.3% over the past year.
There were two large deals in the month with ECA Capital selling 342 N. Rodeo Drive in Beverly Hills, CA, for $400 million, and Bain Capital and 11 North Partners acquiring a 10-property portfolio from PGIM for $395 million. The portfolio totaled nearly 1.1 million SF and was mostly centered in Florida.
Hospitality
Hospitality volume fell 27% with $2 billion in sales activity. Portfolio and entity deals were the culprit, down 94%. Single asset deals were up 44%, indicating that the market is stronger than the headlines suggest. Meanwhile, pricing is on the upswing, increasing 4.5%.
Montgomery Street acquired the leased fee of the Hyatt Regency in Honolulu, HI, for $215 million. Meanwhile, Seafront Holding Group purchased the 361-key Marriott Seattle Waterfront for $145 million, or nearly $402,000 per room. The property traded at a quoted 8.1% cap rate.
