As seen in CRE Daily
U.S. CRE enjoyed a notable Q3 recovery, thanks to higher sales volumes in office and multifamily, while industrial and hospitality were mixed.
As reported by GlobeSt, the U.S. CRE market enjoyed a notable recovery in Q3, driven by rising sales in the office and multifamily sectors. While industrial and hospitality showed mixed results and retail volumes fell, the overall uptrend for commercial property is welcome progress.
Office
The office market demonstrated a surprising comeback, posting a 13% YoY increase in sales volume. Central business districts played a pivotal role, seeing a 79% surge in transaction volumes from July to September compared to historically low figures in 3Q23. This suggests stabilizing market fundamentals, according to Aaron Jodka, research director at Colliers.
Multifamily
Multifamily investment continued to lead in sales volume, closing Q3 with a 9% YoY gain. The segment sustained quarterly sales averaging $38.3B over the past two quarters, matching activity levels last seen in 2017. Jodka noted that markets like San Francisco and Boulder are showing record-breaking YTD figures.
Retail
Meanwhile, retail sales volume fell by 27% YoY, due to a significant portfolio sale in 3Q23. However, when excluding that deal, both single-asset and portfolio transactions have experienced stable performance since early 2023.
Industrial
Industrial property sales were flat YoY, but prices rose by 7%. The sector saw average sales volumes exceeding $23B over the last two quarters, surpassing the pre-pandemic activity levels from 2014 to 2017.
Hospitality
Shifts in hospitality deals revealed a move to full-service properties, where sales shot up by 53%. Single-property deals drove this growth, while limited-service hotel sales tumbled by 35%, balancing overall volume to stay flat compared to 3Q23.
