Year-to-date sales activity for industrial properties and apartments has exceeded year-to-date sales volume on average in the five years leading up to the pandemic (2015-2019), according to a report from Real Capital Analytics.
On the other hand, the sales volume for 2021 in each of the office, retail and hospitality sectors has lagged behind this same five-year benchmark.
Investors are therefore faced with limited options for obtaining money to work in real estate. They can try to outbid other buyers of industrial property and apartments, or they can take a little more risk and buy office, commercial or hotel properties where the prices are not so sparkling, but where there aren’t that many sellers either.
At least two huge real estate players made their choice recently when Blackstone Group and Starwood Capital Group formed a joint venture to privatize Extended Stay America in a $ 6.29 billion deal. The takeover was funded by a $ 4.65 billion floating rate loan from JPMorgan and Citigroup, which is priced at only about 2.65% interest.
In the Richmond area, a remarkable office portfolio is on the market that will test the appetite of underperforming investors.
The Glen Forest office park represents 567,000 square feet of office space spread over 11 buildings off Forest Hill Avenue in Henrico County which have an overall occupancy rate of 86%.