- October office sales hit $5B, up 28% MoM and 18% YoY, driven by activity in central business districts.
- Multifamily sales grew 18% YoY, bolstered by a major $3B student housing portfolio buy by The Scion Group.
- Industrial, retail, and hospitality sales fell, reflecting inventory shortages and investor caution amid economic uncertainty.
The US office sector enjoyed a notable recovery in October, with office sales climbing to $5B, up 28% rise from September, as reported by GlobeSt.
Diving Deeper
Central business districts drove the October surge in office transactions, with deal activity in urban offices increasing 55% YoY.
One of the most prominent transactions was the $443M sale of 701 Brickell in Miami, a 678 KSF office tower acquired by a joint venture between Elliott Management and Morning Calm Management.
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Multifamily Momentum
Multifamily continues to dominate CRE sales, with transactions up 18% YoY. A big driver of this growth was The Scion Group’s acquisition of a $3B, 14-property student housing portfolio from Harrison Street.
Colliers attributed this performance to rising demand and strong investor confidence, signaling multifamily’s ongoing recovery from earlier market disruptions.
Sluggish Sectors
While office and multifamily showed robust growth, other sectors lagged behind:
- Industrial: Sales fell 17% YoY, with activity concentrated in select markets like New Jersey, Florida, and Arizona. Portfolio deals offered some respite, but overall activity remains subdued.
- Retail: Sales declined 19% YoY, with just 243 properties trading hands — the lowest volume of this cycle. The sector struggles with low inventory and market volatility, despite significant deals by Kimco and Simon Property Group.
- Hospitality: Sales dropped 14% YoY, with only 100 properties changing hands in October. The $425M sale of the W South Beach in Miami was a rare bright spot in an otherwise slow month for the sector.
Market Outlook
Despite gains in office and multifamily, October marked the lowest transaction velocity of the current CRE cycle. Portfolio deals, which were up 24% YoY, continue to outpace single-asset transactions, signaling an overall investor preference for larger, diversified investments.
However, uneven performance across asset classes and a rising 10-year Treasury yield could dampen deal-making in Q4, adding uncertainty to an already cautious market.
