Real Estate Alert: Average Office Prices Down 22% This Year
Average sale prices for office and retail properties plunged further in the past year, multifamily valuations dropped after peaking in 2022, and industrial properties and hotels are trading at their highest levels ever.
Those are the top-line findings of Real Estate Alert’s inaugural review of weighted average sale prices on a per-sf and per-unit basis for trades worth $25 million and up in Green Street’s Sales Comps Database.
Through mid-November, the average sale price for office trades was down 21.8% compared to last year’s annual average of $307/sf. In the retail sector, prices fell 10.7% to $219/sf, while multifamily assets saw a 7.6% drop to $254,000/unit. Meanwhile, prices for industrial properties climbed 7.5% from a year earlier to a record $167/sf, and the brisk trading of luxury hotels drove the average sales price per room in the lodging sector up a whopping 38.1% to $409,000.
To be sure, averages can flatten nuances between properties and can get skewed by the composition of the assets trading. For example, owners may be more motivated to shed lower-quality buildings but reluctant to sell coveted trophies at discounts. There also are fewer comparable sales available: The volume of large property sales dropped 61% year over year in the first half, according to Real Estate Alert’s published rankings.
Those are the top-line findings of Real Estate Alert’s inaugural review of weighted average sale prices on a per-sf and per-unit basis for trades worth $25 million and up in Green Street’s Sales Comps Database.
Through mid-November, the average sale price for office trades was down 21.8% compared to last year’s annual average of $307/sf. In the retail sector, prices fell 10.7% to $219/sf, while multifamily assets saw a 7.6% drop to $254,000/unit. Meanwhile, prices for industrial properties climbed 7.5% from a year earlier to a record $167/sf, and the brisk trading of luxury hotels drove the average sales price per room in the lodging sector up a whopping 38.1% to $409,000.
To be sure, averages can flatten nuances between properties and can get skewed by the composition of the assets trading. For example, owners may be more motivated to shed lower-quality buildings but reluctant to sell coveted trophies at discounts. There also are fewer comparable sales available: The volume of large property sales dropped 61% year over year in the first half, according to Real Estate Alert’s published rankings.