WASHINGTON, DC–Last year the Washington DC area was the rare market that exhibited investment sales growth compared with the rest of the nation. New stats from CBRE show that office investment sales volume in the Washington DC metro area came to $7.8 billion in 2017, compared with the $6.4 billion that posted in 2016.

Foreign investment accounted for 42% of the total activity, with most of the capital coming from Japan, Norway and Canada. Spencer Levy, CBRE's Americas Head of Research, says that global capital flows will increase this year after 2017's “down year”, which was partially due to China placing controls on the export of capital to commercial real estate.

In addition, last year saw the area's price per square record topped with the sale of 900 16th St, NW for $1,252 per square foot. In that transaction, a JV between Norges Bank Real Estate Management and Toronto-based Oxford Properties Group acquired the 135,000-square foot building from JBG Cos. and ICG Properties.

Separately, NFK came to a slightly different number when tallying the Washington DC area's office investment sales for 2017 probably because it looked at volumes only through November: it calculates $7.3 billion of deals closed, for a 14% increase in volume compared with the previous year. The average price rose 16.6% year over year, it also said.

Of the 66 sales transactions that occurred this year, 86.4% were for District of Columbia and Northern Virginia assets, NFK says. The District led the region with the highest annual sales volume at $4.3 billion, followed by Northern Virginia at $2.6 billion and Suburban Maryland at $488.6 million. Despite these numbers NFK writes that:

There is a growing sense among investors that in terms of volume, the market peak was 2015. Yet core and trophy assets continue to set pricing records in the Washington market, and cap rates continue to surprise most observers, as they remain low in spite of recent interest rate hikes.

Save

Save

Save

Save