Craig Trbovich Commercial Real Estate –
Most of us in Phoenix Commercial Real Estate are busy enjoying a very active market. At times like these, it’s important to be thankful. A small amount of time or money can be life changing for a family or a child. I recently watched a news report where $25 could buy a backpack full of school supplies for a needy child. To see the smiles on those children was priceless and it took me less than five minutes to go online and do my part.
Although very active, gross investment sales across all sectors have declined in Phoenix and nationwide. However, values continue to rise and vacancy rates remain low, alleviating concern in the market. Investors are also spending more time carefully evaluating opportunities as the market evolves from buying cheap to buying for other qualities.
Below are investment sale numbers for the Phoenix Market with trailing 12-month average comparisons:
Office Investment Sales
Office investment sales have slowed a little as it has become more difficult for investors to find deals as owners let values continue rise. With historically low 1.2 million square feet of new office space under construction and net absorption averaging 3.5 million square feet during 2015 and 2016, Phoenix could see a shortage of office space drive up rental rates over the next couple of years. Recent notable sales include Jasper Ridge Partners purchase of Scottsdale’s Galleria Corporate Centre for $142.5 million ($265/sf), and Cousin’s Properties acquired the Teach Retirement System of Texas’ 70% interest in Tempe’s Hayden Ferry Lakeside for $229,130,982 ($426.83/SF) as part of a larger portfolio sale.
Office Average Sales Price Per Square Foot
Office Annual Sales Volume
Industrial Warehouse Investment Sales
Industrial gross investment sales are also off from the previous twelve months, but the price per square foot is the highest since 2007. And with 4.1 million square feet under construction facing net absorption averaging more than 6 million square feet, strong leasing should continue to push vacancies lower and lease rates higher, maintaining investor interest. Significant transactions include the net-leased Home Depot distribution facility in Tolleson with additional land for future expansion sold by VEREIT, Inc to Cohen Asset Management for $48,000,000 ($102.91/sf), DCT Industrial Trust’s sale of an I-10 Distribution Portfolio to Colony Northstar for $39,000,000 ($69.85/sf), and the sale of Kachina Business Center in Tempe to Libitzky Property Companies by Kieckhefer Properties for $19,100,000 ($95.17/sf).
Industrial Warehouse Average Sales Price Per Square Foot
Industrial Warehouse Annual Sales Volume
Retail Investment Sales
Retail gross investment sales have continued the trend of office and industrial sales, declining total gross sales over the previous twelve months. Although sales values per square foot declined, vacancy rates are very positive remaining below 9.0%. Recent sales include Camelback Center Shops sold by Crow Holdings to Saddle Mountain Investments for $23.5 million ($713/sf) and the 107,633 SF Palm Valley Marketplace sold to Sterling Organization by Regency Centers Corporation for $22,450,000 ($209/sf).
Retail Average Sales Price Per Square Foot
(Source: CoStar Analytics, Investment Sales (non-distressed) Over 15,000 sf.)
In the past five years, we have completed over 6,000 transactions at CPI. That is an average of over 120 transactions per month! Valley-wide, no other commercial real estate firm negotiates, prepares, and completes more transactions than CPI. And I am a member of our exclusive CPI Investment Specialist Team. For a no obligation analysis of your property, please call me at (480) 522-2799 to “TrboCharge” your investment real estate today.