Despite all the headwinds that have rocked commercial real estate during the pandemic, the total dollar amount of investment in commercial properties nationwide is up 10% year over year, according to a new report of CBRE.
Overall, investors spent $167 billion in the commercial market in the second quarter of 2022, a 10% increase from the second quarter of 2021. Multi-family buildings led the way with $78 billion in second-quarter sales up 32% year-over-year. , followed by industrial properties with $32 billion, which was down 1% from a year ago, according to the report.
Office buildings posted sales of $24 billion, down 9% from the second quarter of 2021. Retail, however, came out surprisingly strong, rising 41% year-on-year another to reach $21 billion in real estate sales.
Unsurprisingly, New York led the way nationally with $67 billion in real estate exchanges in the second quarter, followed by Los Angeles with $65 billion. The volume of investment in the five boroughs jumped 104% over the past year, while many small towns in the south and
Sunbelt has experienced even greater growth. Investment sales volume in Houston grew 150% year over year, while Phoenix increased 100%, Orlando, Florida 137% and Las Vegas 133%.
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 describes as “cross-border” – rose 16% year-on-year, but fell 9% in the last quarter as the U.S. dollar was a bit stronger than other major currencies like the euro, the report says. In the second quarter, foreign investors acquired about $3 billion in multi-family properties, $2 billion in industrial buildings and $1 billion in office buildings. Canadian investors were the largest group of foreign buyers, accounting for $24 billion, or 37% of cross-border sales, followed by Singaporean companies, which purchased $14 billion worth of property, accounting for 22% of sales.
Rebecca Baird-Remba can be reached at [email protected].