There are a couple of reasons for those trends, Homa says.

“Redeploying capital has been a difficult proposition this year. You can get good pricing for a core trophy sale but then the investor has the challenge of reinvesting into a high-price market that has relatively few investment alternatives.” Also, he added, over the past 36 months there has been a decisive shift to long term owners buying assets, compared to funds that have a shorter-term to realize gains for their investors. That also translates into a lack of buying opportunities.

Homa says one of the key themes that will emerge next year will be a larger number of opportunistic and distressed properties come to market, especially off-metro buildings that are returned to the lender. “It is part of the lifecycle of any market. You need these buildings to be sold and then rebirthed for them to be competitive again.”

WASHINGTON, DC–Office investment sales for the Washington DC region will likely come in around $6.7 billion, according to unofficial estimate by JLL Research Director Scott Homa. In a typical year, the region tends to close about $6.3 billion. “So we are ending the year slightly above the average overall sales volume,” he tells GlobeSt.com.

Besides that slight uptick in volume, two other shifts in the area's portfolio sales emerged this year.

One was the relative lack of trophy office sales. The largest for the year on a per square foot basis was 733 10th St., NW, which traded at $1,065 per square and a 4.7% cap rate.

The second trend, which relates to the missing trophy sales, was the changing shift in the composition of product available to buy.

There are a couple of reasons for those trends, Homa says.

“Redeploying capital has been a difficult proposition this year. You can get good pricing for a core trophy sale but then the investor has the challenge of reinvesting into a high-price market that has relatively few investment alternatives.” Also, he added, over the past 36 months there has been a decisive shift to long term owners buying assets, compared to funds that have a shorter-term to realize gains for their investors. That also translates into a lack of buying opportunities.

Homa says one of the key themes that will emerge next year will be a larger number of opportunistic and distressed properties come to market, especially off-metro buildings that are returned to the lender. “It is part of the lifecycle of any market. You need these buildings to be sold and then rebirthed for them to be competitive again.”