Suburban Office Sales in Secondary Markets Fared Better in Q2
September 17, 2020
Without a doubt, US office sales took a hit in the second quarter, but properties in suburban markets turned out to be more resilient, according to a new report from Marcus & Millichap. The firm’s Beyond the Global Health Crisis Special Report shows that office sales in the CBD decreased 72% year-over-year in the second quarter, while suburban office sales fell only 54%, which is the highest share of quarterly transaction volume since 2009 when it was 66%.Read the Full Article
During the pandemic, navigating the market dislocation and uncertainty hasn’t been the only challenge for investors; locating opportunities and securing financing have also been problematic. In secondary markets, however, investors have had better luck. Philadelphia, Denver and Phoenix have been the most active markets for office sales velocity, with secondary markets in general posting stronger sales volumes during the pandemic. This, of course, isn’t necessarily a new trend. Pre-pandemic, capital was flooding into secondary markets chasing yield and investors are continuing to find more attractive yields in these markets as the pandemic rages on. By contrast, primary markets, including San Francisco, Miami-Dade, and Seattle-Tacoma recorded the tightest yields.