Recent sales volumes signal market strengthening in some sectors

While the office segment struggled, sales of industrial and multifamily properties showed an upward trend.

While total sales remained subdued in May, portfolio activity and properties on the market suggest stronger months ahead. After single-digit year-on-year declines in March and April, volume fell 38% in May, according to an update from Colliers based on MSCI data.

The office market was typical of volatile monthly sales activity in 2024, with sales volume down 42% from last May, at $2.3 billion in transactions and the fewest individual asset transactions this year. The three largest transactions in May were all in the Bay Area, according to Colliers. They included Pleasanton Corporate Commons, which sold for $151.8 million, Sunnyvale Park Place, which sold for $100.5 million, and 1455 Market Street in San Francisco, which sold for $96.9 million.

On the other hand, industrial sales volume increased month-over-month, reaching $5.4 billion in trade activity. Notably, Prologis sold a 4.1 million-square-foot portfolio in Minnesota to Exeter, and Blackstone sold two portfolios to Terreno Realty and DRA Advisors. This increased activity is a sign of improving liquidity in the industrial market, Colliers said.

Multifamily sales activity also trended higher in May, reaching $6.7 billion in volume. The sector remains the most liquid asset class, and recent portfolio activity signals a possible rebound after significant year-over-year sales declines. The most significant multifamily transaction in May was the sale of a 7,300-unit portfolio by Starwood Capital to Brookfield Asset Management for $1.6 billion.

In retail, only 173 properties sold, the lowest monthly activity since 2010. Sales volume fell 51% year over year to $2.1 billion. But the luxury niche of retail is an exception to the recession. The largest retail transaction in May was TZ Capital’s $180 million acquisition of 680 Madison Ave. in Manhattan. Tenants include Tom Ford, Brioni, Oscar de la Renta, Morgenthal Frederics and Missoni.

Finally, hotel sales were subdued in May, Colliers said. Seventy-one assets sold for $1.5 billion, down 32% in volume from a year ago. That’s the lowest number of transactions since August 2020. Volume was driven primarily by one large transaction — the sale of the Biltmore Resort & Spa in Phoenix for $705 million, or $1 million per room.