Office, Multifamily Lead CRE Sales Volume in October Article originally posted on Globe St. on December 17, 2024 The office and multifamily sectors are leading the CRE sales volume growth as the overall market appears to be stabilizing. The market has posted annual gains in four of the past five months and five of the past seven months, including October, according to a sales volume analysis by Colliers director of national capital markets research Aaron Jodka. Multifamily is typically the volume leader and serves as an indicator of broader market momentum. Both office and multifamily posted an 18% increase in sales volume compared with the same period last year. However, Jodka noted that the number of completed deals has yet to turn the corner, and October’s velocity figure was the lowest so far this cycle. The recent movement in the 10-year Treasury is stalling some deals, which could dampen year-end figures, he said. Portfolio activity is outpacing single-asset transactions year to date, up 24% from last October. Multifamily has posted five straight months of volume topping $10 billion, and in four of those months, year-over-year volume increased. The exception was September when year-over-year sales volume fell 1%. Notable multifamily deals included Scion Group’s acquisition of a 14-property student housing portfolio from Harrison Street. Office volume topped $5 billion in October and was up 28% month-over-month. CBD activity increased by 55% year over year and is beginning to approach suburban volume for the first time in several years, according to the analysis. A highlight of the month was the sale of 701 Brickell in Miami to a joint venture between Elliott Management and Morning Calm Management. Trading for $443 million, or $654 per square foot, it was one of the largest deals of the year. Industrial activity continues to ebb and flow, with sales down 17% in October after posting gains in August in September. The sector is seeing the return of portfolio deals, and a major biomanufacturing transaction pushed the average industrial deal size to its largest number since July 2022. During October, Ambient Capital Partners, Walton Street Capital, and EQT Exeter acquired portfolios in New Jersey, Florida and Arizona, each valued at over $143 million, supporting deal volume. Retail posted a volume decline of 19% in October following signs of stabilization earlier this year. A lack of for-sale products may be partly to blame, as only 243 properties traded in October, a new low point of this cycle, said Jodka. Despite the restrained volume, more prominent players are coming back to the market, including Kimco and Simon Property Group logging two of the month’s largest deals in Florida and New York, respectively. Hospitality is tracking similarly to retail, with several months of positive year-over-year gains reversing in October, when volume fell 14%. This makes it one of the weakest months of the year for the hospitality sector, with 100 properties traded. The sector continued to see single large transactions driving overall market activity. Notably, Reuben Brothers acquired W South Beach in Miami for $425 million, or just above $1 million per key.