WASHINGTON, DC–Local office investment sales are on track to equal or even slightly exceed those in 2015, according to stats from Newmark Knight Frank's BenchMarks 2017, which Greg Leisch, senior managing director of Market Research presented last week.
As a reminder, 2015 was a very good year both nationally and locally, with investment sales peaking.
Unfortunately for much of the rest of the nation, they will not be experiencing a repeat of that good year. As one example, New York's investment sales for office is down about 40% year over year, according to NKF's Sandy Paul.
Incidentally CBRE's Bill Roohan recently told GlobeSt.com a similar trend was underway with the multifamily asset class. The Washington DC area market has closed $5.9 billion in multifamily investment sales so far this year and has another $4 billion under contract, according to Roohan. That compares with the $6.5 billion in multifamily sales that closed for all of 2016. Meanwhile other markets are down flat or 10%. “We are above all markets,” Roohan said.
There are many reasons for the increase in sales this year, Leisch tells GlobeSt.com, but primarily “it seems that Washington, notwithstanding the rhetoric of draining the swamp, is a favored destination for investment dollars because of the steadying influence of the federal establishments here.”
There is also a tremendous amount of capital on the sidelines, still shopping for product. “Washington DC remains attractive and is a target for a lot of that capital,” he says.
Perhaps more significantly, Leisch foresees a gentle landing for this current mini cycle the area is experiencing. 2018 will look a lot like 2016 when sales slowly ratcheted down, he says.
“And unless something strange happens, a world event, a geopolitical event, that would bring this cycle to a sudden close, I think we will see that gradual curtail next year as we did in 2016.”
WASHINGTON, DC–Local office investment sales are on track to equal or even slightly exceed those in 2015, according to stats from Newmark Knight Frank's BenchMarks 2017, which Greg Leisch, senior managing director of Market Research presented last week.
As a reminder, 2015 was a very good year both nationally and locally, with investment sales peaking.
Unfortunately for much of the rest of the nation, they will not be experiencing a repeat of that good year. As one example,
Incidentally CBRE's Bill Roohan recently told GlobeSt.com a similar trend was underway with the multifamily asset class. The Washington DC area market has closed $5.9 billion in multifamily investment sales so far this year and has another $4 billion under contract, according to Roohan. That compares with the $6.5 billion in multifamily sales that closed for all of 2016. Meanwhile other markets are down flat or 10%. “We are above all markets,” Roohan said.
There are many reasons for the increase in sales this year, Leisch tells GlobeSt.com, but primarily “it seems that Washington, notwithstanding the rhetoric of draining the swamp, is a favored destination for investment dollars because of the steadying influence of the federal establishments here.”
There is also a tremendous amount of capital on the sidelines, still shopping for product. “Washington DC remains attractive and is a target for a lot of that capital,” he says.
Perhaps more significantly, Leisch foresees a gentle landing for this current mini cycle the area is experiencing. 2018 will look a lot like 2016 when sales slowly ratcheted down, he says.
“And unless something strange happens, a world event, a geopolitical event, that would bring this cycle to a sudden close, I think we will see that gradual curtail next year as we did in 2016.”
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
