Aaron Jodka
- November continued the trend of weak monthly sales volume.
- The final quarter of 2024 is on track to post the lowest volume of the year.
- Overall sales are down 61% year-over-year.
- No asset class posted monthly sales gains, though October volume was meaningfully revised up.
- Recent Fed commentary sets 2024 to be a more robust market overall.
Office
With $2.8 billion in sales volume, November marked a new monthly low for 2023. Volume is off 54% from last year, and very few CBD properties traded. Distress is visible, with multiple properties selling for less than $100 per square foot.
The largest sale of the month was a joint venture purchase of the Bala Plaza in Lower Merion, PA, for $185 million. The underwritten cap rate on the deal was 7.7%.
Industrial
In November, industrial property sales totaled just $3 billion, the lowest tally since February 2014. Volume declined 52% over October, and smaller portfolio deals drove the market.
The largest deal was a seven-property portfolio in Dallas-Fort Worth, in which Rockpoint paid $142.5 million for 1.4 million square feet of space.
Multifamily
As with other asset classes, November was not a strong month for multifamily sales. Volume is off 68% compared to last year and fell 38% month-over-month. Deals driving the market are generally newer assets.
Recently delivered properties (2022 or 2023) in Atlanta, Charlotte, Oviedo, FL, and Glendale, AZ, were traded during the month. The Atlanta asset sold for $444,118 per unit at a 5.5% cap rate. A 2020-built Santa Maria, CA, property transacted at a 6.0% cap rate.
Retail
Retail volume declined the least month-over-month of all asset classes, down 10%. On the year, volume is off only 32%, with $3.4 billion trading in November.
The largest transaction of the month was Wells Fargo’s acquisition of the former Neiman Marcus in New York’s Hudson Yards for $321.7 million, or $804 per square foot. Previous reports had the sale price at $550 million. Wells Fargo plans to use the space as an office.
Hospitality
In November, $1.3 billion of hospitality properties traded, 69% less than a year ago. Volume also declined 20% from October. The volume and number of properties sold are reminiscent of pandemic-era activity.
The only property to cross the $100 million mark in the month was the 196-room Hilton Brooklyn New York, which traded for $105 million, or $535,714 per room. Ohana Real Estate Investors acquired the property from Frank Inc.
