Year-to-date sales activity for industrial and residential real estate has exceeded the average sales volume for the five years leading up to the pandemic (2015-2019), according to a report by Real Capital Analytics.
On the other hand, sales volume for 2021 in each of the office, retail and hotel sectors lagged the same five-year benchmark.
As a result, investors have limited opportunities to get money to work in real estate. They can try to outbid other industrial and residential real estate buyers, or they can take a little more risk and buy office, retail, or hotel properties that are not as foamy but also not as many sellers.
At least two major real estate companies recently made their choices when Blackstone Group and Starwood Capital Group formed a joint venture to take Extended Stay America’s business private in a $ 6.29 billion deal. The acquisition was funded with a $ 4.65 billion floating rate loan from JPMorgan and Citigroup that cost only about 2.65% interest.
There is a sizeable portfolio of offices in the Richmond area that will test the appetites of high yield investors.
Glen Forest Office Park has 567,000 square feet of office space spread across 11 buildings on Forest Hill Avenue in Henrico County with an overall occupancy rate of 86%.