Metro Volume and Pricing
Single property office investment sales continued right along in the second quarter of 2012, Reis reports. There were nine deals for a transaction volume of $635 million at a mean price of $525 psf. The largest monetary sale of the quarter took place in May, when Shorenstein Partners LLC sold the 248,500-square-foot Hamilton Square property for $198 million ($797 psf.) In April, the 171,200-square-foot 733 10th Street NW sold for $140 million, or $818 psf. The seller was Skanska USA Commercial Development Inc.; the buyer was Jamestown Properties.
The East End again leads all submarkets in square footage and dollar value sold over the past twelve months at 1.6 million square feet and $1 billion. The $656 psf average price for the East End was also the highest. The Downtown submarket was second in volume at 1.4 million square feet sold for a transaction volume of $644 million.
Cap Rate Comparisons and Forecasts
The mean cap rate for second quarter sales was 5.8%, up 20 basis points from the prior quarter and up 40 basis points over 12 months. The rate is down 60 basis points since year-end 2011. The 12-month rolling cap rate finished the quarter at 6.1%, down 20 basis points from the prior quarter but up 30 from the year-end rate. The 12-month rolling cap rate for the South Atlantic region was 7.7%; for the U.S. as a whole the rate was 7.5%. Washington, D.C. cap rates have generally run below the U.S. and South Atlantic averages. Looking forward, Reis expects the 12 month rolling cap rate to remain close to 6.0% through 2014.