After a very strong first quarter of 2014, sales activity in the office sector slowed significantly in the second – to $950 million in total sales volume, down from $2.4 billion. With a typical year being 5.5 billion in sales transactions, however, and with a robust list of buildings in the sales pipeline, 2014 like 2013 will most certainly be an above average year in terms of overall investment. Of note is the fact that the District of Columbia, which typically contributes about 15% to the metro region’s total sales volume, is currently at 70% - with over 50% of the investment coming from overseas. Don’t count the suburbs out though. Core deals downtown have become increasingly competitive and hard to find with pricing at an all-time high. With average suburban cap rates 120 to 180 basis points higher compared to downtown and pricing at 2004 levels, those investors willing to take on some additional risk and invest in the suburbs will be able to eke out premium yields.
By: Nathan Edwards
Director of Research, Cassidy Turley - Washington, D.C.
Email Nathan: Nathan.Edwards@cassidyturley.com
Follow Cassidy Turley on Twitter: @CassidyTurleyRE
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