CBA's Commercial Market Analysis (CMA) Sales Report analyzes yearly and quarterly economic and commercial real estate sales activity and trends at the market and submarket levels. We are pleased to offer this detailed analysis and report for your use and interpretation.
Q1 2024 Summary: Sales Continue to Struggle in Higher Interest Rate Environment
Commercial property sales in Washington continued to face headwinds during the first quarter of 2024. The higher interest rate environment triggered by high inflation and the Federal Reserve’s raising rates in 2022-23 remains challenging for sellers and buyers. While today’s rates are “normal” by historical standards, they are significantly higher than just a few short years ago, as CRE sales broke dollar volume and transaction records in 2021 due to the cheap money era of the COVID pandemic.
Traditionally, the year's first quarter is the slowest for CRE sales and transaction counts, particularly for institutional-grade properties. Based on Q1 2024 sales volumes, we hope this is the case, and that brighter days will soon be ahead for the market.
Overall, only Thurston County showed improved results when comparing Q1 2024 vs Q1 2023. The number of sales was up 40%, and sales volume was also up 324%, mostly boosted by the Fieldstone Senior Living/West Olympia Office Park deal, and a couple of 8-figure office and industrial deals.
In all other researched counties, numbers were down compared to the prior year, with King County showing the smallest drops with sales down 9% and volume down almost 2%. Skagit County showed the largest drops, with 67% in sales and 76% in volume.
By Asset class, Multifamily had a drop of only 2% in the number of sales, while all other classes declined by greater margins. By volume, retail and industrial were the least affected with drops of 3% and 4%, while land and multifamily had larger drops of 35% and 29%.
Q1 - Sales Velocity and Volume (2024 vs 2023) by Counties and Asset Classes
County
- King: -9% in number of sales, -2% in volume for Q1.
- Snohomish: -23% and -33%.
- Pierce: -26% and -20%.
- Spokane: -14% and -54%.
- Kitsap: -28 and -62%.
- Thurston: +40% and +324%.
- Whatcom: -21% and -74%
- Skagit: -67% and -76%
Asset Class
- Office: -12% in number of sales and -16% in volume for Q1.
- Retail: -22% and -3%
- Industrial/Flex: -25% and -4%
- Land: -18% and -35%
- Multifamily: -2% and -29%
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