Are investors returning to the commercial real estate market? A new report from Colliers suggests that they are. And that’s good news for those looking for a turnaround in today’s challenging commercial real estate market.
A good example? Investment activity in the multifamily sector has increased.
According to Colliers’ most recent U.S. capital markets report, $38.8 billion of multifamily assets traded in the second quarter of 2024. That is broadly on pace with this asset class’s pre-pandemic averages from 2016 through 2019.
Colliers also pointed to the industrial sector as one that is again attracting investors. In its report, Colliers said that the industrial sector remains the most attractive for investors seeking to sink their dollars in commercial real estate.
Colliers said that $20 billion of industrial assets traded in the second quarter of this year. At the same time, the average price of these assets increased by 8% on a year-over-year basis.
Investors aren’t flocking to all asset classes, though. Retail investment sales fell to $9.9 billion in the second quarter, according to Colliers. The second quarter, in fact, saw a new cyclical low for volume and the number of properties traded.
However, Colliers also reported that the fundamentals of the retail sector remain solid. This includes solid asking rents and low vacancy levels. Because of these strong fundamentals, Colliers is predicting that investors will gradually return to this sector.
And office? This sector, not surprisingly, isn’t attracting as many investment dollars as it once did. Colliers reported that the office sector generated only $11 billion in investment sales volume during the second quarter.
Colliers said that lenders and special servicers are becoming more active regarding short sales, deeds in lieu of foreclosure and foreclosures in the office sector.
