MarketSnapshot: Multi-Tenant Overall Market

Q4 2024
MarketSnapshot: Multi-Tenant Overall Market

The multi-tenant market demonstrated a strong rebound in fourth quarter 2024, with investment sales activity climbing to $53.9 billion. This marked a robust 36.8% increase over third quarter and pushed the total annual sales volume to $166.9 billion, narrowly surpassing 2023 by 2.9%.

Investment sales activity was led by the industrial sector, which accounted for $22.8 billion in fourth quarter, representing a 31.0% quarterly increase. Office transactions surged by more than 60%, reaching $19.0 billion – the sector’s strongest performance since third quarter 2022. Retail activity rounded out the quarter with $12.0 billion in investment sales volume, marking its strongest showing in over a year.

For the year, industrial maintained its top position by capturing the largest share of total investment volume, backed by demand for modern facilities in logistics and regional hubs. Office outperformed expectations, with medical office properties and large portfolios catching investor attention. Retail activity fell just shy of 2023’s totals, although the sector continues to benefit from increased interest in open-air shopping centers and service-based retail. Still, all sectors currently lag behind the strong performance reported in 2021 and 2022.

Cap rates for multi-tenant investments rose modestly at year-end, increasing just four basis points to an average of 7.05%. This marked the highest overall average in more than a decade.

Private investors drove the majority of multi-tenant acquisitions, representing 55% of the buyer pool in 2024. This group was particularly active in retail, securing 63% of assets traded within the sector. Institutional buyers accounted for 22% of the overall market, with a notable focus on industrial properties. Meanwhile, REITs captured 11% of total activity, favoring retail and office acquisitions. International buyers were relatively quiet this year, contributing to only a small fraction of transactions compared to historic averages.

The multi-tenant market enters 2025 with optimism. Watch for investors to continue favoring industrial and e-commerce-related assets, although an increasingly opportunistic approach may drive renewed focus on recovering office and evolving retail formats.

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