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Data centers lift July CRE sales volume to highest level since 2005
July commercial real estate transaction volume totaled $74.4B, with data center deals contributing $33.8B, while office, hotel, and senior housing also posted gains.
Data center transactions helped push July commercial real estate sales volume to its highest level since 2005, according to Bisnow, with activity supported even as bond market volatility persisted. MSCI’s monthly Capital Trends report put July sales volume at $74.4B, marking a 78% year-over-year increase, though excluding data centers the gain was about 1%.
Deals in the data center sector accounted for $33.8B of the $74.4B total, including BlackRock’s acquisition of Aligned Data Centers, the outlet said. Pricing was also described as flat versus last July, while J.P. Morgan noted that revisions to the monthly data usually add roughly 30% to monthly transaction volume, implying stronger momentum into the third quarter.
The report also showed that transaction volume was up sharply in specific deal categories, with data centers up 1,911% year over year and portfolio and entity-level deals up 376%. By sector, industrial sales volume was flat at $9B, apartment sales fell 16%, and retail sales were down 13%.
Cap rates moved modestly higher overall, with the average cap rate for all transactions at 6.89% in July, up six basis points from the prior month, Bisnow reported. Hotels had the widest spread at an 8.32% average cap rate, office trades averaged a 7.54% cap rate, and industrial cap rates rose by 28 basis points to 7.44% in July.