Investment in office properties remains sluggish. The $17.6 million that changed hands in six transactions during the second quarter brought the year-to-date total to $62.9 million in 10 deals. The average selling price and mean cap rate for the latest quarter’s sales were $60 psf and 11.3%, below and above, respectively, the year-to-date averages. The 12-month rolling mean cap rate per quarter-end was 10.4%, up from 8.4% a year earlier. Not included in the quarter’s totals because of property type, the 49,420-square-foot non-competitive Cambridge Quail I property at 1601-1681 E. Flamingo Road, Las Vegas, traded in a foreclosure sale in April for $30.45 million ($616 psf). SDE LLC and Midland Loan Servicing were buyer and seller. The building, built in1989 and renovated in 2005, was 52.0% vacant at sale date.
“Transaction activity in the Las Vegas office market is trending upward as sellers who have been waiting for the market to improve are trying to salvage some equity ahead of loans coming due,” observes Marcus & Millichap. “In addition, financial institutions are clearing REO assets off of the books, with most properties in the market trading on a per-square-foot basis. This trend will likely continue, as many owners are still under water.”