Miami CRE Investment Sales Drop 80% From 2022 Peak

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Miami’s once seemingly unstoppable investment sales market appears to have come to a screeching halt, with an 80 percent annual dropoff across all commercial real estate asset types in the first quarter of 2023, according to a report from brokerage Dwntwn Realty Advisors.

The numbers indicate that the rapid rise of interest rates throughout 2022 is hitting Miami just as it is elsewhere, despite the strength of its fundamentals, per the report.

Of course, 2022 was an anomaly for Miami, with the total investment volume across 10 core neighborhoods notching $5.4 billion, not too far from the $6.1 billion invested over the course of the prior three years combined. Similar dynamics are true across other asset classes, especially office and multifamily.

Miami’s office sector saw the greatest dropoff, registering just $6 million in sales in the first quarter of 2023, compared with $226 million in 2022, a 97 percent decrease. But like the market overall, the $911 million in office sales throughout 2022 was vastly higher than the norm.

Similarly, multifamily sales fell 83 percent to $40.6 million in the first quarter, compared with $235 million in 2022. But, when viewed historically, multifamily sales in 2022 exceeded all sales between 2019 and 2021.

Land and retail sales decreased by 77 percent and 65 percent, respectively, while hospitality sales saw the smallest slide, at 29 percent. In fact, hospitality’s best year was in 2021, with $842 million in volume, compared with $368 million in 2022.

While transaction volume declined across the board, pricing was more varied. Most asset classes saw substantial gains between 2019 and 2022, with some fluctuation this year, though the transaction volume in the first quarter was mostly too low to draw any conclusions.

Source:  Commercial Observer