Record $2.9B in commercial sales

Real Estate

Metropolitan Jacksonville’s commercial real estate was for sale last year — and a record $2.9 billion in transactions took place.

The Colliers International real estate company called that a “staggering” 67 percent increase from the record $1.7 billion in 2013 and more than double the total of 2012.

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“We continue to be within an outstanding window of opportunity for sellers to take advantage of low interest rates, high valuations and peak pricing,” Colliers said in its year-end investment research and forecast report.

Colliers cited “an insatiable appetite for product from investors and lenders alike.”

Colliers referred to New York-based Real Estate Capital Analytics for some of the statistics.

The biggest sales of the year included the St. Johns Town Center. Ben Carter’s half of the regional lifestyle retail center sold for $375 million, while Simon Property Group retained the other 50 percent. The transaction priced the value of the Southside destination at $750 million.

The retail market led the way at sales of $900 million.

Sales of apartment communities totaled about $776 million, followed by office buildings at $758 million and hotels at $233 million.

Following that were leased buildings, at $163 million, and warehouses at $69 million.

Sales volumes for 2014 were below 2013 only in “NNN asset sales,” which are leased buildings in which the tenant pays rent in addition to a degree of operating costs. The sales were down 33 percent. Also, apartment sales were down just 4 percent.

Colliers said overall, experts expect more of the same in 2015, although rising interest rates could lower some of the record pricing of the past two years.

Apartments/multifamily

Nearly 50 apartments/multifamily communities were sold. The almost 12,300 units traded at an average price of $63,000 each, led by the sale of the new Four at Deerwood at almost $158,000 a unit. Sales were slightly below 2013 but higher than 2012 and much higher than sales from 2008-11.

Office

More than 50 office or flexible-use buildings sold in 2014 including, on the Downtown Northbank, the Bank of America Tower at $88 million; Wells Fargo Center, $79 million; EverBank Center, $47 million; and the 550 Water Street building, $30 million. On the Downtown Southbank, Riverplace Tower sold for $29 million. Larger suburban sales included the Flagler Center flex portfolio.

Colliers said the $758 million in office transactions was up “an incredible” 142 percent from 2013 and seven-fold from 2012. The overall price averaged $90 a square foot, up from $63 in 2013.

Hotels

Hotel sales were led by two transactions — the $122 million acquisition of the Sawgrass Marriott Golf Resort & Spa by Carey Watermark Investors Inc. and the $53 million purchase of the Hyatt Regency Jacksonville Riverfront by Fortress Investment Group. Local hotels sold for an average $81,000 a key, which is the industry term for room.

Leased assets

The 22 net-leased assets sold for $163 million purchase, led by the $46 million of the State Farm Operations Center in Baymeadows. Also, BJ’s Wholesale Club along Philips Highway sold for $18.3 million. Sales were down from $236 million in 2013 and $261 million in 2012, but only because of the lack of local product, Colliers said.

Retail and shopping centers

The number of shopping center sales sold last year, 25, was up slightly but the total sales volume was up substantially because of the St. Johns Town Center sale. Colliers said on the other end of the spectrum, the distressed sale of Regency Square Mall was for just $14 a square foot.

Colliers said retail space was sold at an average $302 per share foot. Not counting St. Johns Town Center or Regency Square Mall, the average was $91 a square foot.

Warehouses

About 12 warehouses traded in 2014, Colliers found. Sales were up substantially from prior years and the average price was $35 a square foot, more than double the $16 in 2013.

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