October's Deal Volume Was the Lowest This Year

Commercial real estate remained in the doldrums in October, with weak sales volume and few deals, according to Colliers’ recent analysis of MSCI data. No asset class showed gains, and some plummeted year-over-year.

In total, deal volume amounted to just $18.3 billion for October – 68% below the figure for October 2022 – and the lowest for this year. Transactions were down 64%.

The highest dollar volume was for multifamily, which achieved $6.2 billion. But that was a slump of 72% YOY and marked a 14% price drop. Only 255 properties traded – the fewest since 2011. Still, there were some deals of more than $100 million, led by TA Realty’s purchase of two properties in Cary, NC and Nashville from Crescent Communities and Pearl Street Partners for $204.6 million. Other significant sales took place in Denver, Raleigh, Phoenix, Randolph, MA, Carrollton, TX, Knoxville, Calabasas, and Eugene, OR.

Industrial sales brought in the second highest volume, scoring $4.8 billion – down 73% YOY, but with a positive 2% change in prices. Smaller portfolio sales over $50 million accounted for most of the volume, led by several deals in New Jersey, and one each in California, North Carolina, and Minnesota. The largest was Prologis’ $184 million purchase of the 1.4 million SF Airpark Logistics Center in Goodyear, AZ.

Office sales totaled $3.1 billion, down 55% YOY with a 10% fall in prices. The 188 properties that changed hands was the lowest monthly total since 2011. The month’s biggest deal was the sale of Metropolitan Square in Washington, DC for $381.3 million. There were also trades in Manhattan, Boston, San Francisco, Palo Alto, and Miami.

Retail sales of $2.9 million were down 48% YOY but experienced the smallest price drop at 7%. However, there was a 62% drop in transactions with only 266 properties sold – the lowest number since the pandemic. Deals were led by Urban Edge’s acquisition of 1.4 million SF in Manhattan – a two-property deal with a 4.9% cap rate. The sale of 24 properties – including 15 retail – in Naples to M Development fetched $184.4 million.

Hospitality achieved only $1.3 billion in sales, down 75% YOY. Though deals were sparse, each property sold for more than its previous price. The highest price, $370 million, was achieved by Hilton Boston Park Plaza, at a 7.1% cap rate. Manhattan, Miami, Boston, and Renton, WA also saw deals.