Devereaux projects that only $782 million in office, industrial and retail projects will sell this year. That would mark almost a 36% drop from the $1.2 billion sold last year and the worst year in sales since 1995, when only $575 million in properties of more than $1 million in value sold. It also would be the first time since 1997 that sales hadn't topped $1 billion.
Devereaux says that private capital, such as syndicators, wealthy individuals and those doing tax-deferred 1031 exchanges continue to be active buyers, but institutional investors, such as insurance companies and pension fund advisors, are not.
Retail is hot, he says, adding grocery-anchored retail centers are especially sought after.
"People will continue to shop in grocery stores no matter what the economy is doing," Devereaux tells GlobeSt.com.
Industrial also is popular with investors, he says.
"But most industrial owners aren't sellers," Devereaux says. "They tend to be long-term holders."
Investors, he says, are focusing on quality construction and core location. They would rather pay extra for a better location and better construction, he says.
Investors also are looking toward capital preservation as opposed to upside potential, in today's volatile market.
He says that lending markets are active, but there's less competition by lenders for deals. And the supply of product on the market is increasing, but not many deals are closing, he adds.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
