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Commercial real estate sector sees record sales in Q3

By Mike Wheatley | November 3, 2021

The commercial real estate sector was initially left reeling in the early days of the coronavirus pandemic as businesses shut up shop and vacated their offices. But now, it’s rapidly bouncing back, with investors snapping up record amounts of commercial real estate during the third quarter.

Surprisingly though, the Wall Street Journal reports that it’s not so much office buildings and shopping malls that are driving this recovery, but rather, things like life science labs, industrial properties that service e-commerce distribution centers and even some apartment buildings.

The Journal reports that commercial real estate sales hit $193 billion in the third quarter, up 19% from 2019. That makes it the largest quarter for commercial property sales on record, according to Real Capital Analytics.

“Coming out of COVID, we’re actually seeing an acceleration of fundamentals across a handful of sectors and that’s really driving investor attention,” said Nadeem Meghji, the head of real estate Americas for Blackstone Inc., in an interview with the Journal. Blackstone has been the largest buyer of U.S. commercial property this year.

Declines during the initial days of the pandemic, particularly of sales of office buildings and shopping centers, have been offset by the first nine months of this year by the large number of sales in other commercial sectors like life science labs, industrial properties, and apartment buildings, according to Real Capital Analytics. Foreign investors are making more purchases, too.

A large proportion of commercial real estate sales this year were single properties, rather than larger investors snapping up multiple properties, which traditionally has always been more common, Real Capital Analytics said.

An index for Green Street, a real estate data and analytics firm, tracks real estate investment trusts. Its index has jumped nearly 22% from its pandemic low reached during the summer of 2020. The index is also 8% higher than it was prior to the pandemic.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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