Out of a total of 721 transactions, a mere 33 capture 59% of the dollar volume!
Sometimes statistics can leave a commercial broker like me in awe. If you have been a follower of this blog for a while, you will see that we occasionally dissect the numbers. This post will focus a few interesting facts.
Over the last 19 quarters (that’s since January 1st, 2015), commercial real estate transfers in Frederick County, Maryland have consistently averaged $85.6 million in sales out of about 38 closings. Breaking it down further, that’s just shy of 3 deals totaling $6.6 million a week.
Gross CRE sales in 2015 reached $302 million and steadily increased to a total of $388 million by the end of 2018. During the first 3 quarters of 2019 sales volume and number of transactions area slightly behind the pace of last year with a total sales volume of $289 million and 106 transitions, but there’s a very strong chance that one or two mega deals could close out the year in the 4th quarter and keep the trend of higher volume going.
What are the mega deals, you ask?
Well, consider the fact that out of the $1.6 billion of commercial real estate sales volume from 721 closed transactions over the last 4 ¾ years, 59% of that volume came from 33 deals that were in excess of $10 million totaling $958 million. And the pace of these larger transactions is increasing each year. Over the last 4 years an average of 6.25 deals in excess of $10 million closed. By the end of the 3rd quarter of this year, 8 mega deals have already closed totaling $176 million equal to 61% of the year’s volume so far.
By far the largest deal that has closed in the last several years was the sale of the 59-acre Medimmune biotech campus complex to AstraZeneca containing over 550,000 square feet of office and research space for a price of $86.5 million in June of 2017.
Then came a string of multifamily properties that have consumed the lion’s share of the deals over $10 million. Consider that the apartment class has consumed 36% of all the mega deals and 55.5% of the sales volume … 12 and $531 million respectively.
The second-place finisher in volume has been the industrial warehouse market with 18% of the mega market at $174 million. All this happened in 5 deals and totaled 1.7 million square feet!
While not many large office buildings have changed hands at arm’s length since 2015, there have been 8 transactions that have combined for $124 million in volume consisting of 860,000 square feet.
The big question that we at MacRo have been asking over the last 2 years, is when (not if) Frederick County annual commercial real estate sales volume will finally reach that elusive $400 million mark? If that is going to happen in 2019, it will take a small handful of these mega deals that will make it happen!
Stay tuned … and in the meantime, enjoy a wonderful Thanksgiving with family and friends next week.
Rocky Mackintosh, President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland, has been an active member of the Frederick community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012. He currently serves as chairman of the board of Frederick Mutual Insurance Company. Established in 1843, it is one of the longest enduring businesses in Frederick County.