Demand in the lagging office investment sales market is becoming noticeably focused on well-located Class A buildings as transactions keep increasing this year, according to a veteran CBRE broker who specializes in institutional-grade properties.
Will Yowell, vice chair of capital markets at the world's largest commercial property brokerage by revenue, said potential buyers are drawn to top-quality office buildings while not paying much attention to renovation opportunities.
"So the better quality buildings with the better tenants, longer-term leases are starting to see trading and that pricing is actually, you know, doing pretty well all things considered," Yowell said in an interview this week at the fall meeting of real estate and land use research organization ULI in Las Vegas.
The bifurcation on the office leasing side is "translating into the sales market," said Yowell, who's worked at CBRE for more than 30 years and has expanded its office institutional properties practice across the Southeast.
After a drop of more than 50% in office sales volume across the U.S. last year, transactions totaled $24.3 billion in the first nine months of 2024, according to CoStar. Activity has gained each quarter this year, "suggesting that the market's low point was in the first quarter of 2024," CoStar said in the report.
Watch the video to find out about the green shoots Yowell sees breaking through in a sign that the office sales market might improve in 2025.