Q3 NUMBERS (2021 vs. 2022) 


Despite a rising interest rate environment through the first three quarters of the year, the commercial property sales market in Washington has remained relatively steady, with the exception of large, institutional office sales.



  • Multifamily represents the highest dollar volume of sales through the first three quarters of 2022, with 33%.
  • Office property sales dollar volume dropped significantly in the 3rd quarter from 30% of sales volume during the first half of 2022 to just 9% in the 3rd quarter.
  • Through the first three quarters of the year, Retail, Industrial, and Land sales remain very consistent in terms of both transaction counts and dollar volumes.
  • Geographically speaking, Pierce, King, and Kitsap counties all witnessed significant year-to-year declines in sales volumes of at least 50%, while Snohomish, Spokane, and Thurston counties had more modest gains of at least 15%.
  • For the fourth consecutive quarter, overall sales volumes declined; however, transaction counts increased for the second consecutive quarter.


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. 


Year-to-Date Analysis

On the surface, comparing the $14.27 billion in commercial property sales in 2022 looks relatively healthy historically speaking and compared to 2021, which was a record year. The number of sales is down 11%, and sales volume is only down a modest 3%. However, there were some very large and notable sales during the first half of the year. And compared to Q3 of last year, transactions are down 22% and dollar volume is down 47%. This is the first quarter this year that has shown negative sales volume when compared to the same quarter activity from 2021.


Additionally, institutional-grade office properties, which tend to be the most valuable of the commercial real estate asset classes, had a significant decline in sales volume during the 3rd quarter. During the first six months of 2022, office properties represented 30 percent of the total sales volumes, but during the 3rd quarter, that share dropped to 9 percent. This was driven by no office sales over $70 million, whereas during the first six months of the year there were five such sales representing $1.92 billion. This may be due to the combination of weaker office market leasing fundamentals with rising vacancies and negative absorption, higher interest rates, lack of clarity as to when more office workers will return to the office, and a softening tech sector in the Seattle and Bellevue markets.


The other major property asset classes have fared much better through the first 9 months of the year and have been more consistent. Multifamily properties have been the number one asset in sales volume, with 33% of sales, while Retail has been number one in number of transactions, at 33%. Industrial and Land sales continue to be relatively steady from quarter to quarter. Industrial has been 17% of sales volume and 14% of transactions, while land has been 13% of sales volume and 16% of transactions.


Year-to-Year Comparisons

Looking at Q3 numbers compared to the same period in 2021, Spokane County showed gains in both sales velocity (24%) and volume (15%). Snohomish County posted the highest gain in sales volume at 27% despite a 13% drop in the number of sales. Thurston County posted a positive 25% in sales volume due to the Hawks Prairie Logistics Center deal ($90.75m) but had a 43% drop in sales velocity. The rest of the researched counties all ended in the red. For sales velocity: King (-21%), Pierce (-35%), Kitsap (-52%). For sales volume: King (-53%), Pierce (-70%), Kitsap (-43%).


For Q3 comparisons by asset class, Retail was a bright spot, up 32% in sales volume with velocity only down by one sale. Industrial/Flex held steady with a 1% increase in sales volume, but a 24% drop in the number of sales. Office had the largest drop in volume (-83%) with velocity (-34%). The rest of the researched asset classes breakdown like this: Sales Velocity: Land (-36%), Multifamily (-20%). For sales volume: Land (-42%), Multifamily (-48%).


Notable sales in excess of $100M were scarce this quarter, with only four total sales compared to 22 notable sales in Q3 2021. Year to date, there are 19 notable sales recorded. At the same point in 2021, there were 30.


Looking Ahead

Traditionally, the 4th quarter of the year is the highest dollar and transaction volume of the year. Coming off record years in 2019 and 2021 (each around $22 billion in volume), along with a rising interest rate environment, it is perfectly reasonable to expect that 2022 will not see another record. Year-to-date sales volume for 2022 is already at $14.27B. If there was not another single sale of commercial property during the 4th quarter (which will not happen), 2022 would rank as the 6th best year for sales since 2010. This would be just short of 2015, 2016, and 2018, which each averaged $14.87 billion per year. Thus, we expect 2022 to exceed those levels and to finish as the 3rd highest year on record since 2010 for commercial property sales.


Looking to 2023 and 2024, much of the market health for commercial property sales will depend upon several factors, including: How high the Federal Reserve raises interest rates and how long rates remain at those levels; the severity of a technology-sector-led recession in 2023 where layoffs are beginning to be announced in the Puget Sound region; how long before we begin to see a recovery of the office leasing markets in Seattle and the Eastside; and whether the state of Washington and Puget Sound economy can continue to outperform the rest of the country in terms of population growth, unemployment levels, and/or job growth.