Retail Condo Building Sales in the Washington area Surged to $4.7 Billion

NNN Lease Market 

Mixed-use Urban Projects Have Drawn Retailers and Investors in DC

Apartment and condo building sales in the Washington area surged to $4.7 billion in 2011, a $1.1 billion increase from 2010 and a sign that investors’ efforts to buy into D.C.’s surging demand for rentals in particular is on the rise, according to newly released data from CBRE GroupInc. Multifamily sales for the year surged from $3.54 billion in 2010, according to CBRE. 

The brokerage’s District-based Multi-Housing Investment Properties team reported its own sales volume increased to $1.8 billion, up from $1.4 billion in 2010. Properties near Metro stations tended to command the strongest sale prices and rental rates increased more in the District than in its outlying suburbs, the brokerage said. www.bizjournals

Retail condominiums become popular with investors , expect to see a lot more retail condos coming to market within the next two to five years, because there are so many mixed-used developments under way nationally.

Deals are coming on the market in D.C. that will be over a $1,000 a square foot.” Retail condos will compete for single-tenant property deals. Instead of buying a Starbucks drive-through in a tertiary market, now you have a choice to buy a Starbucks retail condo, where there are a million people in a five-mile radius. www.icsc.org

 An increase in mixed use residential condominiums brought about by population movement toward the urban core  and  a pause in expansion by national retailers has contributed to the wide-ranging demand for NNN urban properties.  Coming on the heels of the recession and the ensuing across-the-board hike in cap rates, this move to dense, high traffic urban locations signals where investors want to be over the next decade. Recently identified as a top niche investment trend by the Urban Land Institute (ULI), mixed-use urban projects have drawn retailers and investors to this asset type even in the current market cycle.  Driven by a desire to spend less time in traffic, live in a smaller footprint and work and play within an urban atmosphere, aging boomers are leaving the edge and making their way back to the city. www.calkain.com