One of the big, largely unreported stories of 2024 has been the slow, but steady rise of commercial real estate (CRE) activity.
The extremely disappointing office sales comps have done a lot to undermine CRE confidence. However outside of office and some multifamily distress – largely from purchases in 2021 at peak values with floating rate debt – distress remains limited.
Underneath the surface, however, the story is more encouraging. Activity – as measured by sales listings, appraisals procured, and environmental due diligence reports ordered – has risen consistently for the last five months. Activity is now approaching pre-COVID norms. A recent and rare headline supports this perspective by showcasing the resilience of the CRE market despite recent economic volatility and highlights five months of steady increases tracked by the LightBox Monthly CRE Activity Index.
In addition, large property acquisitions continue to take place.
A closer look at the data for July indicates that there were 33 sales of $100 million or more, with the average transaction valued at $191.8 million. Those sales represented 30 unique buyers in July alone. Furthermore, three additional sales were announced on August 1st, indicating a continued upward trend as we move into the new month.
Those numbers come on the heels of last month’s report which indicated that over the previous 90 days, there were more than 60 unique buyers who made CRE purchases exceeding $100 million, either as single properties or as part of larger portfolios.
The sustained growth in transaction activity and big-ticket sales is evidence that some buyers are actively deploying capital and are not waiting on Fed rate cuts to acquire assets.
It is also worth noting that if the analysis included buyers who spent more than $100 million across multiple properties, the list of unique buyers would expand even further. This broader perspective highlights the increasing activity and investment in the CRE market, suggesting a cautious but optimistic outlook for the near future.
As we monitor these trends, it will be essential to see if this momentum can sustain itself and lead to more robust growth in the coming months. The steady increase in high-value transactions hints at a market that is slowly but surely finding its footing once again.
Download the full list of “big” buyers and tune in to our podcast, The CRE Weekly Digest, for more commentary on early dealmaking news and emerging opportunities.
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