US life sciences vacancy slightly up in 2022; Terra offers $500M for Fla. asset

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

Life science properties in the U.S. saw a slight uptick in vacancy and sublease space in 2022 as the sector's growth subdued from its 2021 peak, Cushman & Wakefield said in a report.

The overall market vacancy rate stood at 9.2% in 2022, up 70 basis points from the previous year, the commercial real estate services firm said in its 2023 March Life Sciences Update. Sublease space in 2022 grew 60 basis points year over year to 1.6%.

Most of the life sciences space under construction is speculative, with only 28% of the 25 million square feet of space due to be completed in the next two years is pre-leased.

"Investment continues to flow into the life sciences sector, and while the peak of 2021 funding and growth may not be replicated in the short term, the sector will continue to grow in the long term," Cushman said in the report.

CHART OF THE WEEK: Median implied capitalization rate for US REITs grows in Q4'22

⮞ The median implied capitalization rate for US equity real estate investment trusts grew 41 basis points in the fourth quarter of 2022 to 7.3%, according to data compiled by S&P Global Market Intelligence.

⮞ The office sector traded at the highest median implied capitalization rate of 9.5% at the end of 2022, up 59 basis points from the previous quarter.

⮞ The self-storage sector traded at the lowest median implied capitalization rate at 5.1%.

Property transactions

– Property developer Terra Group LLC is offering $500 million to purchase Castle Beach Club, an 18-story, 570-unit condominium building at 5445 Collins Ave. in Miami Beach, Fla., The Real Deal reported.

– RADCO Cos. sold the Crossings at McDonough and the Crossings at Eagle's Landing in Stockbridge, Ga., to multifamily-focused real estate syndication firm Viking Capital for $96.5 million, Real Estate Weekly reported. The properties collectively feature 419 units, offering one-, two- and three-bedroom apartments.

– Commercial real estate firm Stream Realty Partners LP purchased 488,000 square feet of industrial space at Garner Business Park 70 in Garner, NC, from Al. Neyer in two separate transactions totaling $74.14 million, the Triangle Business Journal reported, citing Wake County deed records.

– A partnership between industrial real estate fund manager BKM Capital Partners LP and an affiliate of Investcorp paid approximately $157.8 million in an off-market transaction to purchase a seven-property light industrial portfolio in Las Vegas from Terry York Properties, Commercial Property Executive reported, citing the Clark County Recorder's Office.

Data Dispatch: 20 US REITs, 2 Canadian REITs raise dividend payments in February