(Editor’s note: News releases are published unedited, unless they contain factual errors.)
Phoenix, August 15, 2018 – The Greater Phoenix investment market started off slow in 2018, but activity picked up in second quarter with momentum building in the office and industrial properties sectors.
Sales velocities were mixed during the second quarter. Office and industrial properties were sold at an accelerated pace while sales of shopping centers and medical office condos slowed. In most case, transaction activity in the first half of 2018 tracked very closely to the volume of first half 2017. Sales of office buildings spiked during second quarter, increasing more than 40 percent over first quarter. The largest increase was experienced in properties that sold between $10-$25 million. Industrial building sales rose by 12 percent second quarter compared to first quarter. Medical office condo sales dropped by approximately 25 percent from first to second quarter. Transaction counts in this sector are down 25 percent from the same period in 2017.
Sales prices rose during the second quarter. Some of the greatest gains were posted in traditional office and medical office properties. The median price for office space rose to $195 per square foot in second quarter, creating an average year-to-date of $166 per square foot. Prices for industrial buildings experienced steep price gains in the past few years but have leveled off somewhat in 2018. Prices for retail centers retreated a bit in second quarter, following a steep spike at the beginning of the year. The median price in shopping centers sold during second quarter was $139 per square foot, down approximately 25 percent from first quarter.
Cap rates averaged in the high-six percent to mid-seven percent range across Greater Phoenix during second quarter. Cap rates remain low, despite interest rate increases because of robust demand from investors seeking quality assets.
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Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 13,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $20 billion of assets under management from the world’s most respected institutional real estate investors.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row.
Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years.
Colliers International in Greater Phoenix has served clients locally and globally for more than 35 years.