Reis reports only one small office sale during the second quarter following none the quarter before and only three, for a combined total of $67.5 million (averaging $171 psf), completed all told in 2011. The 12-month rolling cap rate per second quarter 2012 was 7.8%, up from 7.0% four quarters prior. In the latest quarter’s sole transaction, Blake Holding Corporation paid Jefferson-Pilot Investments Inc. $2.8 million ($60 psf) for the 46,500-square-foot Corporate Center on Broadway Property in Tucson. The sale closed in June at a 7.8% cap rate.
“Most investor sales are driven by distress, namely short sales and auction activity,” states a second quarter report on the local market by Cushman & Wakefield /PICOR. “We do note a few small user buildings in escrow and a recent sale of shell space at $127.50 psf that will occupy at approximately $190 (psf) total after interior improvements.”