Despite ongoing market correction, there were small signs of life as some green shoots began to emerge in the commercial property sales market.


Summary Highlights from Q2 2023:

  • Quarter-to-quarter sales velocity and volume trended upward for the first time since Q3 2021.
  • Four of five major asset classes increased transaction counts.
  • Three of five major asset classes increased dollar volume.
  • Overall, aggregate numbers are still a long way from their last peaks, with velocity down 45% from Q4 2021 and volume down 80% from Q3 2021.
  • Market activity was still dominated by sales of smaller, non-institutional grade properties due to volatility in capital markets and uncertainty in the overall economy.

CBA's Commercial Market Analysis (CMA)Sales Report analyzes quarterly economic and commercial real estate sales activity and trends at the market and submarket levels. We are pleased to offer this detailed analysis and report for your use and interpretation. This report compares same-month and quarterly numbers by asset class and Washington’s six largest counties from 2022 through 2023.


Summary Analysis & Interpretation

After six straight quarters of decline in sales activity, things trended up slightly in Q2 2023 for the first time since 2021. Does this mean the commercial property sales market has reached the trough of this cycle? Possibly, but only time will tell. Two key factors for market recovery will be tied to interest rates and the technology sector.


If the Federal Reserve is finished, or nearly finished, with this interest-rate-raising cycle, the market should begin to respond favorably to a stable interest rate environment, and more sales, particularly larger, notable sales should begin to occur more frequently.


The tech sector, long the fundamental driver of jobs and office-market growth for the region, will play a crucial role in how quickly the office market (leasing and sales) recovers. Are the major tech companies finished cutting jobs? And how forceful will large tech companies be in requiring employees to return to the office, thus spurring demand for office space? That remains to be seen. But, for the foreseeable future, the trend of office tenants offering hybrid working arrangements and downsizing space requirements when renewing leases will remain headwinds in the sector.


Quarterly & Year-to-Date Sales

On a positive note, from Q1 to Q2 2023 there was a 9% increase in the number of sales transactions and a 12% increase in sales volume. This marks the first quarter-to-quarter increase since Q3 2021, or almost 2 years, and the first since the Federal Reserve began raising interest rates in early 2022. However, for Q2 2023 vs. Q2 2022, velocity and volume were down 26% and 66%. Given the trends of the past year and a half during the interest-rate-raising cycle, this is not a surprise.


For the first half of 2023, sales velocity was down 26% and sales volume was down 68%, compared to 2022. While this is not particularly encouraging on the surface, the fact that transactions and volume increased during the 2nd quarter of 2023 may be an indicator that the market has reached its trough and signs of improvement will continue during the second half of 2023.

Notable sales have been rare in 2023. Q1 only saw one deal close over $100m, which was the Modera Broadway Apartments in Seattle back in February. In June, two more notable sales occurred: the I-5 Logistics Center (Industrial) in Lacey closed for $132.1m, and the Lakes Apartments in Bellevue closed for $103m.


Counties and Asset Classes

Comparing Q2 2023 to Q2 2022 activity by county, Thurston County was the only area with positive gains in sales velocity and volume. The county saw a 17% increase in the number of sales, and a large 209% increase in sales volume, mainly driven by the closing of the Lacey I-5 Logistics Center. Spokane saw the largest jump in sales velocity, with a 31% increase, but saw a modest 1.7% drop in sales volume. Kitsap County saw a small 8% increase in velocity but with a drop of 64% in volume. The rest of the counties all saw negative numbers for same-quarter comparisons: King County (velocity -43%, volume -77%); Snohomish County (velocity -32%, volume -68%); Pierce County (velocity -21%, volume -22%).


Looking at the same quarter activity by asset class compared to the prior year (2022), everything was in the negative. Office (velocity -18%, volume -56%), Retail (velocity -20%, volume -57%), Industrial/Flex (velocity -17%, volume -47%), Land (velocity -35%, volume -72%) and Multifamily (velocity -43%, volume -60%).


However, when comparing asset classes from Q1 to Q2 2023, things are starting to look a bit better. Four out of five major asset classes had increases in transaction counts, and three out of five asset classes had increases in dollar volumes. Multifamily and Industrial performed the best from Q1 to Q2.


Quarterly asset class performance, from best to worst:


  • Multifamily transactions increased 37% with a 42% increase in volume.
  • Industrial was up 21% in transactions and 30% in volume.
  • Retail was up modestly in transactions at 4% and up 15% in volume.
  • Land was mixed with a 20% increase in transactions, but a 13% decrease in volume.
  • Office continued to be the worst performer with a 13% drop in transactions and 30% decrease in volume.




CBA researches office, retail, industrial, and land sales, $250,000 or more, in King, Snohomish, Pierce, Spokane, Kitsap, and Thurston counties. Multi-family sales of $250,000+, and 5-units+, are researched in King, Pierce, and Snohomish counties. All the raw data provided in our reports are pulled directly from the CBAcma database.


For questions about the report, please contact Binh Truong, Director of Market Data and Business Development, at or 425-952-2727.