INDUSTRIAL-FLEX INVESTMENT SALES OVERVIEW
MARKET HIGHLIGHTS
HOUSTON
The cumulative monthly sales value for the year through June 30, 2022, in the Greater Houston area registered at $1.95 billion, down less than 1% from last year at $1.93 billion. The primary capital composition for buyers year-to-date 2022 was made up of 61% private investors and 31% institutional. For sellers, the majority were 52% REIT/listed investors, 25% private, and 19% institutional. In a recent significant transaction, Mirae Asset Global Investments acquired the 1.5 million-sq.-ft. distribution center and headquarters campus for Academy Sports + Outdoors at 1800 N. Mason Road in Katy for $190 million. The property, situated on more than 93 acres, is occupied by Academy under a long-term, triple-net lease where the tenant pays the property expenses.
AUSTIN A recent notable transaction involved the sale of Innovation Business Park, a 361,467-sq.-ft. industrial development located in the northern Auston suburb of Hutto. The two-building complex is leased to Western Industries, Three Way Logistics, and Barnsco. CenterPoint Properties purchased the asset for an undisclosed price from a partnership between Ledo Capital Group and St. Clair Commercial Real Estate. The cumulative monthly sales value for the year through June 30, 2022, in the Greater Austin area registered at $488.9 million, down 4% from this time last year at $507.8 million. The primary capital composition for buyers so far in 2022 was made up of 69% institutional investors and 29% private investors. The seller composition was 53% REIT/listed investors and 47% private.
SAN ANTONIO
The cumulative monthly sales value for the year through June 30, 2022, in the Greater San Antonio area registered at $480.4 million, up 80% from last year at $265.6 million. The primary capital composition for buyers at the halfway point in 2022 comprised 63% institutional investors, 21% private, and 8.5% cross-border. For sellers, the majority were 47% REIT/listed investors and 47% private. In a recent significant transaction, KKR acquired the Corner Ridge Crossing industrial park for an undisclosed price from Hines. The industrial park comprises four properties totaling 576,046 sq. ft. and was 95% leased to a mix of national and regional tenant at the time of the sale.
MULTIFAMILY INVESTMENT SALES OVERVIEW
MARKET HIGHLIGHTS
HOUSTON Heading into the year’s second half, it seems 2022 will be another record year for multifamily investment volume. Out-of-state investors continue to drive investment volume in Houston, with out-of-state firms accounting for more than 80% of buyer volume over the past four quarters. In addition, rising competition for multifamily assets has pushed average market pricing by about 12% over the past year.
AUSTIN Austin was considered by many to be a tertiary market just a decade ago, but the city’s prominence has risen sharply over the past 10 years, and the Texas capitol is now firmly planted among the nation’s secondary markets. With a long up-cycle for multifamily, investors had plenty of time to push away from core coastal markets, with the state capital bringing plenty of investment dollars to the fast-growing Austin metro. However, as prices have continued to rise in Austin, local investors have found themselves edged out of most sales. Instead, national and foreign buyers have dominated purchasing over the past year.
SAN ANTONIO
Investment has come rushing into San Antonio, both in the form of development, followed by acquisitions of new, well-leased properties. CoStar estimates that roughly $5 billion worth of units changed hands in 2021, the highest year on record for multifamily investment in this market. This is more than double 2019, the previous record-holder, and a figure that would have seemed unattainable in years past. San Antonio was the 24th-largest multifamily investment market in the United States in 2019; now, it is the 13th.
OFFICE INVESTMENT SALES OVERVIEW
MARKET HIGHLIGHTS
HOUSTON
The cumulative monthly sales value for the year through June 30, 2022, in the Greater Houston area registered at $975.9 million, up over 50% from last year at $624.2 million. The primary capital composition for buyers year-to-date 2022 was made up of 71% private investors, 12% institutional, and 7.6% cross-border. For sellers, the majority were 39% institutional investors, 36% private, and 22% cross-border. A significant sales transaction during the second quarter of 2022 involved One Park 10 Plaza, a 162,919-sq.-ft., eight-story office tower in the Energy Corridor acquired by Interra Capital Group. The property is part of the Park Ten Office Park, a 550-acre mixed-use, master-planned development. One Park 10 Plaza includes a four-story parking garage on 3.27 acres. Accesso Partners LLC sold the property for an undisclosed price.
AUSTIN One of the most notable office transactions in Austin in Q2 2022 was Arc Capital Partners finalizing a deal for Westview, a 100,166-sq.-ft., six-story building located two blocks from the Texas State Capitol between Guadalupe and Lavaca streets at 316 W. 12th St. The sale price was not disclosed, though Arc secured $39 million through Grant Street Funding for the purchase, according to public record. The cumulative monthly sales value for the year through June 30, 2022, in the Greater Austin area registered at $1.15 billion, down 24% from last year at $1.52 billion. The primary capital composition for buyers so far in 2022 was made up of 64% private investors and 13% institutional investors. The seller composition was 81% private investor, 9% institutional, and 8% REIT/listed.
SAN ANTONIO
The cumulative monthly sales value for the year through June 30, 2022, in the Greater San Antonio area registered at $467.6 million, up over 100% from last year at $227.6 million. The primary capital composition for buyers at the halfway point in 2022 was made up of 88% private investors and 10% institutional. For sellers, the majority were 52% private investors, 21% REIT/listed, 16% institutional, and 10% user/other investors. In a significant sales transaction in 2022, KKR acquired the Corner Ridge Crossing industrial park for an undisclosed price from Hines. The industrial park comprises four properties totaling 576,046 sq. ft. and was 95% leased to a mix of national and regional tenants at the time of the sale.
RETAIL INVESTMENT SALES OVERVIEW
MARKET HIGHLIGHTS
HOUSTON
The cumulative monthly sales value for the year through June 30, 2022, in the Greater Houston area registered at the $1.09 billion, up 70% from last year at $642.6 million. The primary capital composition for buyers year-to-date 2022 was made up of 61% private investors, 23% REIT/listed, and 16% institutional. For sellers, the majority were 50% private investors, 31% institutional, and 15% REIT/listed. Among recent noteworthy transactions, locally based Wu Properties has purchased Market Square at Eldridge, a 262,556-sq.-ft. retail center at 2660 Eldridge Pkwy. S., about four miles south of the Energy corridor. The 32-acreproperty was 98% leased at the time of the sale.
AUSTIN A noteworthy transaction in the second quarter included the sale of La Frontera Village, a 534,566-sq.-ft. shopping center at 2601 La Frontera Blvd. Built in 1980, the property was 92% leased at the time of sale. Tenants include Kohl’s, Hobby Lobby, Burlington Coat Factory, Marshalls, Barnes & Noble, and Cost Plus. The cumulative monthly sales value for the year through June 30, 2022, in the Greater Austin area registered at $496.2 million, up 58% from this time last year at $314.3 million. The primary capital composition was 88% private investors and 8% institutional.
SAN ANTONIO
The cumulative monthly sales value for the year through June 30, 2022, in the Greater San Antonio area registered at $200.7 million, down 30% from last year at $287.3 million. The primary capital composition for buyers year-to-date 2022 was made up of 87% private investors and 11% institutional. For sellers, the majority were 92% private investors and 8% REIT/listed. A recent noteworthy transaction included PBC Interests acquiring the 126,000-sq.-ft. Seguin Crossroads Shopping Center positioned along the State Highway 123 bypass. The property was nearly 70% unoccupied when PBC Interests entered the deal. Seguin’s retail trade area includes a population of more than 120,000 people.
SELF-STORAGE INVESTMENT SALES OVERVIEW
MARKET HIGHLIGHTS
STREET RATES AND NEW SUPPLY
Yardi Matrix reported that the relationship between new supply and street rate performance continues to be weak for storage markets. With storage supply greater than 10 net rentable square feet (NRSF) per capita, the Houston, Austin, and Dallas-Fort Worth metros could be seen as oversupplied. However, these three Texas markets continue to see healthy rate performance; all three experiences record-high average rate performance for all storage units in June.
WORK-FROM-HOME AND SELF-STORAGE GROWTH
The self-storage sector was an unpredicted winner after the pandemic. Ranking among the top performing asset classes in commercial real estate in 2021, self-storage racked up $10.9 billion in sales transactions, representing a 161% increase over 2020 nationwide. Relocation trends and work-from-home policies drove the notable performance over the last two years. The office market had an impact, with some of the biggest storage tenants being businesses storing furniture and supplies.
HIGHER COST OF CAPITAL
Rising internet rates and inflation have softened investment eagerness, although the most active groups are still looking for deals to purchase. Investors may be a little more selective in order to reach their sales targets, with the cost of capital being higher. Despite challenges, the demand for these investment opportunities will continue to be available, with experts predicting the industry to grow to nearly $65 billion in value by 2026.