Craig Trbovich Commercial Real Estate –
Phoenix CRE investment sales results for the first half of 2015 are in with a range of positive numbers. The Industrial sector continues to be a strong sector, approaching 2007’s peak levels! Office, slow to come back until recently, is gaining momentum with impressive gains. And Retail is having a breakout year in 2015 after four years of stagnation.
I reported on economic news in my recent leasing market report, Swimming Upstream, that there is uncertainty in our economy, but positive results continue. China’s troubles have made the headlines recently as the stock market has retracted, but our Q2 GDP results were just adjusted upward from 3.2% growth to 3.7%, further showing our economy is continuing to grow. Volatility is expected from time to time, especially after the long bull market that stocks have experienced in recent years. Overall, the current instability may prove to be more of a bump in the road rather than the beginning of another recession. Next on the horizon – interest rates.
Below, investment sale numbers have been updated with trailing 12 month average comparisons and a chart showing Average Sales Price per Square Foot and Annual Sales Volume for each product type.
Industrial Warehouse Investment Sales
Average price per square foot up 30% over the previous 12 month period! If you notice in the graph below the table, average sales price is showing $90 for 2015 due to a couple of large single credit-tenant leased sales this year and not reflective of the overall market. Nevertheless, total properties traded and sales volume are up significantly year over year, pointing to another good year for the Industrial sector in 2015.
Industrial Warehouse Average Sales Price Per Square Foot
Industrial Warehouse Annual Sales Volume
Office Investment Sales
Investors continue to see a brighter future for the Phoenix Office market, with a 24% rise in values per square foot and a 36% increase in total sales dollars. And year-to-date sales volume for 2015 is on pace to be the best since 2007! After years of unimpressive results, the Office sector is gaining steam.
Office Average Sales Price Per Square Foot
Office Annual Sales Volume
Retail Investment Sales
Retail investments have been unable to sustain continued growth in recent years. For example, average sales price per square foot from 2011 to now has been $124.02 as sales values have had up and down results. And the total number of buildings sold per year has average 160. However, 2015 is shaping up to be one of the better years and could turn out to be the best year since 2011 if results stay on track.
Retail Average Sales Price Per Square Foot
Retail Annual Sales Volume
Source: CoStar Analytics, Investment Sales (non-distressed) Over 15,000 sf.
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