For buyers and sellers of commercial property, 2013 was a very good year. By the time all CRE sales are tallied, total commercial real estate sales are expected to be more than 18% higher in 2013 from the previous year as U.S. property fundamentals and the economy continued to improve and investors in all property types fanned out into smaller markets in search of higher returns.
According to CoStar COMPs data based on property transactions of all sizes that closed by Dec. 31 and were recorded as of Jan. 15, sales of office, industrial, retail, multifamily, hospitality and land totaled $366 billion in 2013 — 17% higher than the $312.4 billion in property that changed hands in 2012. CoStar continues to track down and tabulate additional 2013 property transaction activity, which is expected to boost total sales for 2013 to nearly $370 billion when all deals are counted.
In any case, the preliminary figures clearly reflect the strongest year for CRE investment since 2007, when $489.6 billion in total transactions were recorded.
As of the second week of January, property sales totals for the fourth quarter of 2013 were below the record-setting volume of a year ago, with a preliminary $106.3 billion in sales tallied as of Jan. 15, though that number is almost certain to rise in coming days and weeks. Property sales spiked in December 2012 as investors hustled to close deals prior to year-end, driven in part by concern over anticipated tax hikes and the restoration of previous tax rates for capital gains. The rush helped drive total CRE sales volume to $115.86 billion in fourth-quarter 2012.
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