Craig Trbovich Commercial Real Estate –
Investment sales in Phoenix are continuing the momentum that has been building in recent years. The Industrial sector is strong and approaching 2007’s peak levels. Office investment sales are having a big year with huge increases in values and total sales volume. And Retail is having a breakout year in 2015 after four years of lackluster results.
An interesting point to note in each sector’s charts below is the setback that occurred in the recovery during 2013. That was the year when Federal tax increases and sequestration cuts went into effect, and then a Federal government shutdown occurred in October. All combined to negatively impact our recovery that year.
It’s also interesting to note that we finally have the peak levels of 2006-07 in our sights. We are not there yet, but you can look at the highs in the charts below and get a feel for when we might climb to new highs. For example, industrial could surpass 2007 next year. Office sales are possibly 2-3 years away from 2007 highs and Retail could be 3-4 years away if trends continue.
Look below at the investment sale numbers with trailing 12 month average comparisons and charts showing Average Sales Price per Square Foot and Annual Sales Volume for each product type. What do you think?
Industrial Warehouse Investment Sales
Average price per square foot continues climbing with a 17% increase over the previous 12 month period. Total properties traded and sales volume are up significantly year over year, pointing to another good year for the Industrial sector in 2015. Looking at the charts below, sales volume is on track be the highest since 2007 and price per square foot could exceed 2007 highs in 2016.
Industrial Warehouse Average Sales Price Per Square Foot
Industrial Warehouse Annual Sales Volume
Office Investment Sales
2015 is proving to be the big breakout recovery for office properties with a 37% rise in values per square foot and a whopping 108% increase in total sales dollars. Sales volume through the first three quarters has already made 2015 the best year since 2007!
Office Average Sales Price Per Square Foot
Office Annual Sales Volume
Retail Investment Sales
Retail sales are also showing improvement after a bumpy recovery over the past five years with a 17% increase in sales price per square foot. And 193 buildings sold over the past twelve months is more than the 140 sold at the peak in 2006. However, average sales price per square foot in 2006 was $192.26, well above the $154.54 below. Overall, retail is having an improving year and appears to be on track for continued success.
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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