Q2 NUMBERS (2021 vs. 2022) 


After record-setting sales in 2019 and 2021, commercial property sales markets remained healthy during the first half of 2022, despite signs of slowing due to rising interest rates. 



  • During the first half of 2022, the market recorded $9.83 billion in commercial property sales, a 41.7% increase from the same period of 2021; however, the number of transactions declined by 3.2%.  
  • Institutional investors and developers continued to view Puget Sound as a Tier One investment market and were willing to bet on the strength of this market for the long run, as demonstrated by large acquisitions by Boston Properties, BioMed Realty, Blackstone, Security Properties, Harbor Group International, and Acacia Capital.  
  • Multifamily was the clear winner of the quarter with $1.68B in sales volume, likely due to the softening of the single-family home market due to rising interest rates while the state of Washington remains in a housing shortage/crisis. Local media reported that some condominium developers are even beginning to convert projects to apartments prior to completion.  
  • Snohomish County posted $809M in sales volume, the second highest quarter for the county for the last six quarters. (Q4 2021 is the highest with $1.25B).  
  • Despite economic headwinds of high inflation and rising interest rates, the Washington and Puget Sound economy remains healthy with new job creation, population growth, and declining unemployment. 


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.


In this report, we compare same-month and quarterly sales numbers by asset class and county from 2019 through 2022.  While 2021 featured a drastic rise in sales activity across the board, the peak occurred in Q3 and Q4, which is consistent with the seasonal pattern of sales. This pace was not expected to continue, and 2022 sales numbers have settled back down to levels seen around Q2 of 2021.


Looking closer at 2022 and comparing Q1 to Q2 on a quarter-to-quarter level, activity was relatively flat. Sales volume decreased slightly by less than 1% (-$40.4M), while number of sales increased by around 10% (+51 sales). However, comparing Q2 numbers from the same period in 2021, sales volume is up significantly by 42% (+$1.4B), despite the number of sales being down almost 10% (-59 sales). This underscores the larger, institutional-grade investment activity in the market during the quarter.


Breaking down Q2, Kitsap and Snohomish Counties had the biggest increases in sales activity compared to same periods in 2021. Kitsap had a sales volume increase of 195% and a jump of 37% in a number of sales. Snohomish saw a 134% increase in volume and 11% in sales. King County had a 32% increase in volume and a 5.5% improvement in sales, and Pierce had a 40% boost in volume but a 22% decrease in sales. Spokane and Thurston counties were in the red for both categories, with Spokane -22% in volume, -55% in sales, and Thurston -14% in volume and -37% in sales. By asset class, Multifamily was the brightest spot, with a 222% increase in sales volume and a 42% increase in number of sales from the same period in 2021. Office was up 26% in volume and down 43% in sales, Retail up 3% and 11%, Industrial/Flex down in both categories at -9% and -27%, and Land finished up 13% in volume and down 5% in number of sales.  


Notable sales in excess of $100M were few but they were large, and most of them occurred in the Multifamily asset class. But the $730M acquisition of downtown Seattle’s Madison Centre office building by Boston Properties provided a big buoy for the quarter.  


Some questions and uncertainty have arisen in media reports about the health of the commercial markets in Seattle, particularly around the topics of remote working, inflation, and interest rates. While we will not speculate on the future, some things are clear. We are still in the midst of a health emergency and pandemic. Interest rates have risen sharply over the past 6 months, meaning borrowing costs for buyers and developers are significantly higher than they were during a historic era of cheap money over the past number of years. Higher inflation impacts many aspects of commercial real estate, including construction and labor costs, transportation and energy expenses, building operations, and tenants’ abilities to operate their businesses. Global supply chain disruptions caused by the pandemic, while improved, are still a factor for businesses and many in commercial real estate.


Looking forward to the next 6-12 months, full-year commercial 2022 sales levels are unlikely to match the record-setting volumes of 2019 or 2021. However, the overall health and outlook of the local economy and commercial markets remain positive and better than most in the USA. Therefore, it’s likely that investors will continue to seek opportunities within the market due to our attractive commercial fundamentals.