- Volume is stabilizing, with annual gains observed in four of the past five months and five of the past seven, including October.
- Office and multifamily are leading the charge, each up 18% from levels seen a year ago. Multifamily, the typical volume leader, serves as a harbinger of broader market momentum.
- Despite gains, the number of completed deals has yet to turn the corner, with October posting the lowest velocity figure so far this cycle.
- Portfolio activity is up 24% over last October and is far outpacing single-asset transactions year-to-date.
- Recent movement in the 10-year Treasury is causing deals to stall, which could stunt year-end tallies in the months ahead.
Aaron Jodka
Volume is stabilizing, with annual gains observed in four of the past five months and five of the past seven, including October.
Office
Office volume topped $5 billion for the month, one of the more promising showings of the year, and was up 28% compared to September. CBD activity rose by 55% compared to last October and is now approaching suburban volume for the first time in several years.
A highlight of the month was the sale of 701 Brickell in Miami to a joint venture between Elliott Management and Morning Calm Management. The 678,000 SF building traded for $443 million, or $654/SF, making it one of the year’s largest deals.
Industrial
Industrial activity continues to ebb and flow. Compared to volume from one year ago, sales are down 17% after back-to-back months of gains in August and September. Portfolio deals are returning to the market, and thanks to a major biomanufacturing transaction, the average deal size is the largest since July 2022.
In October, Ambient Capital Partners, Walton Street Capital, and EQT Exeter acquired portfolios in New Jersey, Florida, and Arizona, each valued at over $143 million, supporting deal volume.
Multifamily
Multifamily is waking up, with five straight months of volume topping $10 billion. In four of those months, year-over-year volume increased, with the lone exception being a 1% decline in September. As the largest asset class by volume, the rebound in multifamily is meaningful for overall investment sales activity.
Scion Group acquired a 14-property student housing portfolio from Harrison Street, spread across the U.S., marking one of the month’s key transactions.
Retail
Retail volume continues to show signs of volatility, with year-over-year metrics posting a decline of 19%. This trend follows signs of stabilization earlier in the year. Indicators suggest that a lack of for-sale product is partly to blame for the relatively stunted volume. In October, a total of 243 properties traded, marking the new low point of this cycle.
Despite the restrained volume, more prominent players are coming back to the market. In October, Kimco and Simon Property Group, through a partner buyout, led two of the month’s largest deals in Florida and New York, respectively.
Hospitality
Hospitality has performed similarly to retail, with some months earlier this year posting year-over-year gains; however, that trend has recently reversed. In October, 100 properties traded, the lowest number in this cycle. Volume was off by 14%, marking one of the weakest months of the year.
October continued the trend of a single large transaction driving overall market activity, with the W South Beach in Miami trading for $425 million, or just above $1 million/key. Reuben Brothers acquired the asset from a joint venture of RFR Realty and TriStar Capital.
