• Investors acquired $26.5 billion of property across the major asset classes in July, a 10% decline from one year ago.
• This marks the second consecutive month of lower volume on a year-over-year basis.
• Retail was the only asset class to post notable gains in July, while multifamily was marginally positive at 1%. The other asset classes declined.
• Data center volume (which is not included in the totals above) finally saw some action, with $1.3 billion in deals.
• Recent revisions have resulted in stronger overall figures one to two months out, suggesting that conditions are broadly flat.

Colliers Insight

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Office 

Office volume totaled $3.8 billion in July, down 16% after 12 consecutive months of year-over-year gains. This decline was largely driven by a lack of CBD sales, which were down 44%. Single-asset deals, however, were up 2%, suggesting that this was a monthly blip. 

The largest deal of the month was Cousins Properties’ acquisition of The Link at Uptown in Dallas. The property traded at $747/SF, one of the highest prices recorded for a Dallas office building.

Industrial 

Industrial sales totaled $6.7 billion, a 22% decline from one year ago. Both single-asset trades and portfolio deals were down compared to last July. Pricing, however, is accelerating per RCA’s CPPI. 

While portfolio volume posted a drop in July, several deals still closed. Crow Holdings sold 6 million SF to Blackstone for $718 million, while retaining a small interest. Meanwhile, Mapletree sold two portfolios of 1.9 million and 1.8 million SF, respectively, for a total of $569 million.

Multifamily 

Multifamily activity was, for all intents and purposes, flat in July. Volume rose 1%, hitting $10.6 billion. In general, figures are revised retroactively, suggesting stronger conditions than initially reported. Portfolio activity increased 11% in July, a positive sign of improving market conditions. 

The largest deal of the month was Fairfield Residential’s acquisition of nearly 1,600 units in the Phoenix metro from Sunroad Enterprises for $462.4 million. In New York, 180 Water, a former office property, sold for $345 million in a partial interest transfer.

Retail 

Retail led all asset classes in volume gains, up 22%, totaling $4.4 billion in sales. Single-asset and portfolio deals both posted gains in July. Pricing is also pacing the market, up 4.2% year-over-year. 

Federal Realty acquired two properties in Leawood, KS, for $289 million, marking the largest deal of the month. Brixmor bought LaCenterra at Cinco Ranch in Houston for $223 million, while Regency Centers and CBL were also active. Increased activity from REITs supports market liquidity.

Hospitality 

Hospitality had the largest pullback of the major asset classes, with volume down 52% in July. A total of $1 billion traded. Year-to-date, this is the only major asset class to post a drop in volume. Pricing is improving, with RCA’s CPPI up 2.4% in July. 

There were no large-scale transactions in July to boost volume. Without a resort or sizable property trade, the market was supported by single-asset deals. The Belmond El Encanto and Garden Villas in Santa Barbara traded for $82 million, or nearly $900,000/key. The 92-room property will undergo a renovation.