October has seen a striking divergence in commercial real estate sales, with office and multifamily sectors powering ahead while industrial, retail, and hospitality struggled. According to a new report from Colliers, office sales surged to $5 billion, marking a 28% jump from September and a solid 18% increase year-over-year.
Multifamily also posted strong numbers, with an 18% year-over-year increase in sales. The sector remains the largest by volume, and its ongoing rebound signals broader market strength, according to Colliers. The Scion Group made a major move by acquiring a 14-property student housing portfolio from Harrison Street, further cementing the multifamily sector’s recovery.
Colliers found that sales of office properties in central business districts (CBDs) led the way in transaction activity, with a 55% rise in activity compared to October 2023, as urban offices continue to attract investor interest. The $443 million sale of 701 Brickell in Miami, a 678,000-square-foot office tower, to a joint venture between Elliott Management and Morning Calm Management, was one of the largest sales last month.
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In contrast, industrial, retail, and hospitality markets all faced downturns. Industrial sales fell 17% year-over-year, with portfolio transactions offering a glimmer of hope. Despite major deals in New Jersey, Florida, and Arizona, overall activity remains sluggish in the sector, with uncertainty around the broader economic environment.
Colliers found that sales of retail properties declined by 19% year-over-year and attributed the change in activity to a lack of available inventory and ongoing market volatility. Only 243 retail properties traded in October, the lowest number in the cycle. Major players like Kimco and Simon Property Group managed to make a splash with two of the month’s largest deals in Florida and New York, but the sector continues to struggle with slower deal velocity.
Hospitality, similarly, faced a tough month, with a 14% dip in sales year-over-year. Just 100 properties changed hands in October, marking the weakest month in this cycle. The W South Beach in Miami, which traded for $425 million, was the biggest transaction, highlighting the challenges facing the sector.
While commercial real estate volumes are stabilizing, overall deal-making remains sluggish. Office and multifamily sales show year-over-year growth, indicating broader market strength, but October marked the lowest transaction velocity of the cycle, reflecting ongoing caution among investors.
Portfolio transactions, up 24% from last October, continue to outpace single-asset deals. However, the recent movement in 10-year Treasury yields may stall momentum in the final quarter of the year, dampening the outlook for deal-making.
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