- February sales posted the weakest monthly volume since February 2012.
- Month-over-month volume fell 49%, more than the typical January to February drop-off.
- Multifamily had the strongest relative performance, leading in volume and showing the lowest annual volume decline.
- The Fed’s announcement confirming three rate cuts this year should bolster activity going forward.
- The strength of the equities market is also creating a denominator effect for real estate, suggesting upside.
Aaron Jodka
Multifamily had the strongest performance, leading volume and showing the lowest annual volume decline.
Office
Office volume fell in February at a 62% pace from a year ago, after months of mostly flat to slightly increased volume. CBD sales were quite limited, with monthly volume in line with 2009 levels.
One of the largest deals of the month was CoStar Group’s acquisition of 1201 Wilson Blvd., a 521,000 SF property in Arlington, VA, for $325 million. The new buyer plans to occupy the space.
Industrial
Industrial trades totaled $3 billion in February, a marked slowdown from January and a 60% decline year-over-year. Similar to office, industrial volumes had also shown signs of leveling off in recent months. The last time volume dipped below $3 billion in a month was February 2014.
CenterPoint Properties acquired a four-property, 539,000 SF portfolio in Compton, CA, for $196.5 million in one of the month’s largest deals. The assets are older infill properties built between 1950 and 1972.
One of the largest deals of the month was CoStar Group’s acquisition of 1201 Wilson Blvd., a 521,000 SF property in Arlington, VA, for $325 million. The new buyer plans to occupy the space.
Multifamily
Multifamily had the most robust relative performance of all asset classes, with volume down 35% year-over-year, which aligns with recent monthly performance. It was also the highest volume asset class of the month.
One of the more notable deals this month was the sale of The Aire, a 310-unit apartment complex in Manhattan. The property traded for $265 million to a Gotham Organization and Carlyle Group joint venture. The in-place cap rate was 4.7%.
Retail
After a stellar January, retail volume fell off in February. On a year-over-year pace, sales are down 75%, a steeper drop than in recent months. Monthly volume and properties traded were reminiscent of pandemic-era activity.
One of the larger deals of the month was Alamo Group and Covenant Group’s joint venture acquisition of Walla Walla Town Center in Washington. The 360,000 SF shopping center traded for $87.5 million.
Hospitality
In February, less than $1 billion in hospitality assets traded, a 69% decline from last year. A total of 80 properties transacted, the lowest number since August 2020.
Leading the largest deals of the month, which all took place in California, the Housing Authority of Los Angeles sold two Extended Stay America properties in Los Angeles. Volunteers of America Los Angeles acquired the properties, a total of 263 keys, for $92.4 million.
