After a slow 2023, the investment property market is starting to recover as Buyers and Sellers start to adjust to the new interest rate environment.

Notable deals in 2024 include:

• Sale of the Gallup headquarters downtown for $130 million
• The $33 million purchase of the 2421 River Road industrial building in Council Bluffs
• Sale of the Graphic Packaging industrial building in Omaha for $22.8 million

Excluding multi family housing, transaction volume through October 2024 was $343 million compared to $130 million for the same period in 2023. The large deals mentioned earlier were mostly absent in 2023, which made a significant difference.

In 2024, we saw a large number of smaller investment transactions, mostly retail strip centers and smaller flex industrial buildings. Demand for these properties is high and pricing is strong. As of October 20, smaller retail and industrial multi-tenant buildings were sold, along with 16 single-tenant buildings.

Fluctuating Treasury Rates Affect Loan Costs

The 10-year treasury rate has fluctuated significantly this year, ranging from 3.65% to 4.7%, and has recently increased sharply. The 10 year treasury rate is not linked to the Fed’s short-term rate; it serves as a benchmark for many commercial loans. Current borrowing costs range from mid-6% to low-7% range, depending on the loan type and lender.

Summary

There is substantial capital in the current market. Assuming interest rates don’t spike, we expect the recovery in investment sales to continue in 2025.