Despite all the headwinds buffeting commercial real estate during the pandemic, the total dollar amount of investment in commercial properties nationwide rose 10 percent year-over-year, according to a new report from CBR.
Overall, investors spent $167 billion in the commercial market in the second quarter of 2022, a 10 percent increase from the second quarter of 2021. Multifamily buildings led the way with $78 billion in second-quarter sales, up 32 percent year-over-year , followed by industrial properties with $32 billion, which declined 1 percent from a year ago, according to the report.
Office buildings saw $24 billion in sales, sliding 9 percent from the second quarter of 2021. Retail, however, came out surprisingly strong, rising 41 percent year-over-year to $21 billion in property sales.
Unsurprisingly, New York City led the way nationwide with $67 billion in property trading in the second quarter, followed by Los Angeles with $65 billion. Investment volume in the five boroughs surged 104 percent over the past year, while many smaller cities in the south and the
Sunbelt saw even larger growth. Investment sales volume in Houston grew a whopping 150 percent year-over-year while increasing 100 percent in Phoenix, 137 percent in Orlando, Fla. and 133 percent in Las Vegas.
Institutional investors were the typical buyers during the second quarter of this year, while sellers were mainly private investors, real estate investment trusts and foreign companies.
Foreign investment — which CBRE refers to as “cross-border” — grew 16 percent compared to the same time year but was down 9 percent over the past quarter, because the US dollar has been somewhat stronger than other major currencies like the euro, the report said. In the second quarter, foreign investors picked up about $3 billion in multifamily properties, $2 billion in industrial buildings and $1 billion in office buildings. Canadian investors were the biggest group of foreign buyers, representing $24 billion, or 37 percent of cross-border sales, followed by Singaporean companies, which purchased $14 billion in real estate accounting for 22 percent of sales.
Rebecca Baird-Remba can be reached at [email protected].