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Tracking San Diego’s Capital Markets
The latest CBRE Group, Inc. research reveals interesting trends in San Diego’s capital markets, property sales activity and cap rates. Data for the second half of 2016 (H2), as of March 2017, found that overall capital markets investment activity was flat in H2 compared to H1 2016, but picked up in the fourth quarter.
Total sales volume lagged behind previous years, although average deal sizes were among the highest recorded across most product types. Apartment sales volume in 2016 was the highest since the end of the recession, while retail was the only other product type to experience growth from the previous year.
Other key San Diego findings include:
- Suburban office cap rates were the lowest among all Tier II metros across all classes in H2 2016.
- Retail cap rates tied for the lowest among all Tier I and II metros in both Class A neighborhood and power centers in H2 2016.
- Sales volume was down nationally in the office sector in 2016. Annual sales growth was particularly low in San Diego compared to peer markets, largely due to an unusually robust 2015.
- Despite a down year for office sales in San Diego, the price per sq. ft. was the highest since the end of the recession.
- Retail was the only CRE type in the region to experience growth in sales from 2015 to 2016, and San Diego outpaced the U.S. average growth.
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