At first glance, it appears the real estate market this year slowed compared with 2017 and late 2016 when trophies were trading with ease. But don't jump to conclusions.

Ken Krasnow.

“The total volume might have gone down, but that's not indicative of a lack of demand or a market that's correcting or anything like that,” said Ken Krasnow, executive managing director at Colliers International South Florida.

The average price per square foot for the 10 biggest sales through September, a more telling metric than total dollars, in each asset class has increased compared with the first three quarters of 2017.

In office transactions, the average price per square foot reached $309, or 7 percent higher than last year's top deals. In retail, the price hit $393 per square foot, up 8 percent. In industrial, the price reached $140 per square foot, up 30 percent in a booming market, according to Colliers.

The hospitality industry also is healthier if the average price per room for the top 10 deals is an indicator. It reached $280,702 this year — a 34 percent increase from last.

The older trades like the $516 million Southeast Financial Center and the $283 million sale of 1111 Lincoln Road are anomalies, Krasnow added. Because there's a limited number of these asset types, they trade infrequently.

MARKET OVERVIEW

Still, a year-over-year comparison of South Florida's top deals shows some asset classes netted bigger deals in the year ended Sept. 14 compared with the previous period, but others were void of trophy transactions.

Dollar values for office and retail deals weren't as high. But industrial and hotel scored significant trophy trades in the past year unlike the year before. Multifamily and land deals were on track with apartment building sales staying strong in light of a residential market that's largely turning to apartments rather than condominiums on both the tenant and investment sides.

Hotels might end up being the sector with the biggest deal this year — with talks reported for a $500 million trade of the 426-room 1 Hotel South Beach at 2341 Collins Ave.

MSD Capital LP, a New York-based investor that exclusively manages the capital of Dell Technologies founder and CEO Michael Dell, has been negotiating to buy the hotel for nearly $1.2 million per room from Greenwich, Connecticut-based Starwood Capital Group, according to media reports.

MSD Capital declined comment. Starwood and listing broker Hodges Ward Elliott didn't return requests for comment by deadline.

If true, this sale would be triple the price of the top hotel deal for 2017 and late 2016, the $163 million trade of Fort Lauderdale's Pier Sixty-Six Hotel & Marina in December 2016.

From the confirmed deals, the office market this year, just like last, scored the top trade.

New York-based global investor KKR & Co. Inc., in partnership with Orlando-based office real estate owner and operator Parkway Properties Inc., paid $248 million for the 522,892-square-foot, 30-story Sabadell Financial Center on 1.78 acres in Miami's Brickell district. The building is also called 1111 Brickell.

The top retail deal was made by Illinois-based InvenTrust Properties Corp., which focuses its real estate assets on supermarket-anchored properties, buying the Trader Joe's-anchored PGA Plaza at 2658 PGA Blvd. in Palm Beach Gardens for $88 million from Delray Beach-based Menin Development Inc.

The Sabadell and PGA Plaza deals amounted to less than half the prices of the top deals in their sectors in the past two years, namely the $516 million Southeast Financial Center and $283 million 1111 Lincoln trades.

The category that pulled ahead for the year on major transactions is industrial. In the biggest industrial deal of the year, Flagler Global Logistics, a supply chain manager, and Florida East Coast Industries LLC subsidiary sold more than 1 million square feet of Hialeah industrial space for $180 million to Indianapolis, Indiana-based Duke Realty Corp. in July. The buildings that traded are part of the bigger Countyline Corporate Park that Flagler's been developing on the northwest corner of Northwest 154th Street and 97th Avenue.

“This is just a unique phenomenon seen in industrial space that you don't have in some of the other asset classes — new development,” Krasnow said. “Newly built, meeting all the new bells and whistles for whatever product you are delivering and then newly leased with long-term credit tenants. That is the true definition of a core investment.”

Also notable was the $92.2 million trade of a portfolio in Medley and Hialeah Gardens. Boston-based real estate investor TA Realty LLC through an affiliate bought the 10-lot portfolio from a limited liability company registered to Coral Gables-based real estate investor COFE Properties, according to the county property appraiser's office and the state Division of Corporations.

PLAYERS IN, PLAYERS OUT

This year Boca Raton-based investor Crocker Partners LLC unloaded two of its major downtown Miami holdings while retaining the 34-story Citigroup Center east of Biscayne Boulevard.

At the same time, Sabadell Financial buyer KKR is a new South Florida investor as it had no real estate in the region before the purchase.

Roger Morales.

It was attracted in part by population growth and the live-work-play urban core, said Roger Morales, KKR member and head of commercial real estate acquisitions for the Americas.

The population in downtown Miami and Brickell is getting younger with the biggest group being people between 24 and 44 and the second biggest group being children up to 14, Morales said KKR research shows.

“Which basically proves the Brickell-downtown area of Miami is finally really a kind of a 24-hour live-work-play city, not just a place where people work, which historically for some time was the case,” said Morales, based in New York. “You've got really young people living there. There's a lot of restaurants and a lot of commercial activity coming online. From a demographic perspective, just the idea that today so many people are within those age demographics, 24 to 44 and zero to 14, means they are working there and/or starting families there, which was part of the investment thesis for us.”

The retail, dining, office and residential Brickell City Centre added to the “urban feel” of Brickell, Morales added.