Commercial property sales are broadly rebounding to pre-pandemic levels across the country, though the same success isn’t being seen in select markets that dominated before the pandemic.
Investors spent $144.7 billion on commercial property during the second quarter, nearly three-times the amount recorded in the same period last year, the Wall Street Journal reported, citing data from Real Capital Analytics.
While it is unsurprising that more property was sold this year than in the early months of the pandemic, that second-quarter figure also lines up favorably against pre-pandemic numbers.
An average of $127.2 billion in commercial property was sold in the second quarter from 2015 to 2019, indicating that sales can remain robust in a post-pandemic world — a stark contrast from the sustained struggles that followed the financial crisis.
The big winners from the report are suburban and Sunbelt markets that saw growth as people moved away from major metropolitan areas during the pandemic. A handful of cities, including Dallas, Atlanta, Phoenix and Tampa saw record first-half commercial property sales volume.
Manhattan was among the cities to lose its grip on the commercial property market, though, as the return of tourists and office workers remains slow.
Manhattan ranked second among markets tracked by Real Capital Analytics in first-half commercial property sales in 2019, but fell to 11th place this year. San Francisco, meanwhile, fell from 10th place in 2019 to 15th place this year.
Rental apartments and life-science office buildings are among the commercial properties expected to see more robust growth moving forward, according to Brad Gries, co-head of the Americas for real estate investment firm LaSalle Investment Management.
[WSJ] — Holden Walter-Warner