Washington's Commercial Real Estate Property Sales Rebound Significantly During Q1 2021 Compared to 2020

Washington's Commercial Real Estate Property Sales Rebound Significantly During Q1 2021 Compared to 2020

  • Terri Augustyn
  • 05/10/21

CBA's Commercial Market Analysis (CMA) Sales Report analyzes quarterly economic and commercial real estate sales activity and trends at the market and submarket levels. We are pleased to offer this detailed analysis and report for your use and interpretation. In this report, we compare same-month and total quarterly sales by asset class and county from 2020 to 2021.

Summary Highlights of Q1 2021

The market saw a 71% quarterly increase in dollar volume and a 16.5% increase in transaction volume compared to Q1 2020

The rebound was led by the Industrial and Multifamily property segments, which witnessed 296% and 126% increases in dollar volume, respectively.

Office property sales, despite an 11% drop in dollar volume from the prior year, saw a surge in the number of sale transactions, increasing 51%.

Retail properties, despite challenges associated with COVID-19 economic shutdowns and restrictions over the past 12 months, saw a 14.5% increase in dollar volume and a 4.7% increase in sale transactions.

Washington state’s commercial real estate property sales market has gotten off to a strong start in 2021. Going into the 1st quarter of 2020, the industry faced the significant hurdle of Washington’s increased Real Estate Excise Tax (REET). With the additional onset of COVID-19 and the resulting economic shutdowns and restrictions that began in late March, the CRE sales market slowed and struggled in the 2nd and 3rd quarters of 2020.

By the 4th quarter of 2020, though, positive signs of activity and recovery were emerging, and that momentum has carried into the 1st quarter of 2021.

Overall, Q1 2021 sales volume was up 70.7% compared to 2020 1st quarter numbers and the number of sales transactions was up 16.6%.

2021 sales volume for January ($1.11 billion) and March ($1.07 billion) were higher than any month in 2020, except for December and September.

February 2021 ($634.8 million) would have also ranked as the 6th most productive month last year. The CRE sales market is clearly off to a good start in 2021 as COVID-19 vaccinations increase across the population and economic restrictions slowly begin to loosen.

By county, there were major gains in sales volume in Snohomish (308.9%) and Pierce (122.2%). King (37.4%), Spokane (37%), and Kitsap (54%) also saw positive gains. 

Thurston (-5.5%) showed the only comparative drop for the 1st quarter. The number of sales was more tempered, but notably, Snohomish was up 50%, with Pierce (23.5%), King (14.7%), and Thurston (4.3%) next in line. Drops in Kitsap (-20%) and Spokane (-10%) might raise a red flag, but those decreases represent only a handful of sales differences in each county.

By asset class, Industrial/Flex (295.6%) and Multifamily (126.4%) were the clear winners in sales volume, with Retail (14.5%) and Land (9.4%) showing slight improvements. Odd at first glance, Office (-10.8%) was the only class to drop in sales volume, but it was first in a number of sales gained (51.4%). The clear agitator with this trend is the single $401.5m sale of Tower 333 in March of 2020. The comparative number of sales for the other classes were Industrial/Flex (32.5%), Multifamily (12.5%), Retail (4.7%), and Land (-7.1%).

Work With Us

Whether its about selling your biggest asset to managing it - we have it all right here. The right people. The best-in-class business. The best partners.