One of the emerging narratives of the summer of 2024, was the slow but steady rebound in the commercial real estate (CRE) markets. Sharply lower Treasury yields, tighter lending spreads, and the anticipated Fed rate cuts—finally realized in September—helped boost optimism in recent months.
The decline in Treasury yields contributed to lower cap rates, helping to restore some of the value lost from late 2022 through early 2024. This same drop in yields also provided relief for borrowers facing significant “cash in” refinancings, allowing them to secure new capital on slightly less onerous terms.
For buyers, lower rates made it easier for deals to “pencil out,” leading to a steady uptick in sales and refinancing activity over the past few months.
As early as June, LightBox noted that dozens of big-ticket deals were closing each month, and that trend persisted through September. While negative headlines about office space dominated 2024, a closer look at the data reveals steady activity in big-ticket sales.
In September alone, there were 29 sales of $100 million or more, with the average transaction valued nearing $185 million—an increase from 24 such sales in August. Beyond the 29 major deals, another nine transactions fell between $90 million and $100 million. October also got off to a strong start, with several nine-figure sales reported early in the month.
The top announced sales were led by the acquisition of the budget motel chain, Motel 6, by Oyo. The Indian-based travel company purchased the motel chain for $525 million. Blackstone, the seller, previously purchased the motel chain in 2012 for $1.9 billion.
Other major sales in September included the nearly $450 million paid by Elliott Investment Management to Nuveen for the 33-story tower at 701 Brickell Avenue office in Miami. The 687,000 square feet office building was renovated in 2021 and is more than 90% leased. TIAA purchased the building in 2002 for $172 million, according to records.
In one of Silicon Valley’s largest real estate deals this year, Microsoft has purchased the 33.3-acre Mountain View Tech Campus at 1045 La Avenida Street for $330 million. The site, which previously served as a major employment hub for the Bay Area while under lease to Microsoft, will now officially be owned by the tech giant.
Download the full list of “big” buyers and tune in to our podcast, The CRE Weekly Digest, for more commentary on early dealmaking news and emerging opportunities.
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