Regional Retail Property Sales Dip Nearly 30% from the First Half of 2018, but Annual Transaction Volume Still Hits Record High
A Special Year-end Retail Investment Report
Puget Sound retail property sales totaled $640.6 million ($443.38 PSF) for the last six months of 2018. This was down 9% from the same time period last year. Changing retail fundamentals, uncertainty over U.S.-China trade tariffs and macroeconomic factors such as interest rate increases by the Fed and a dramatic decline in the stock market in the second half of the year, contributed to this result. The Russell 2000 saw the largest change, falling 18.5% from the beginning of July, followed by the Nasdaq, which dropped 11.9% in the same time frame.
July through September saw the most completed deals, as $383.2 million worth of properties traded hands. For the year 2018, properties valued at over $1.5 billion properties sold, the largest annual total since 2013.
Nationally, $45.8 billion in retail properties sold in the second half of 2018, up 62% from the same period of last year. Compared to other property types, retail was the least affected by market insecurity, with national property sales increasing by nearly $12 million for the last six months of 2018. The average national cap rate for all property types at year-end was 6.6%; the Puget Sound’s was slightly lower at 6.31%.