Remember that so-called disconnect between commercial property values and fundamentals? If 2005 was any indication, it may soon be forgotten. Sales transactions for commercial real estate buildings reached an eye-popping $270 billion last year, according to Real Capital Analytics, which tracks deals $5 million and higher. That's a whopping 46% increase over the level of sales activity posted in 2004.

At the same time, leasing activity across all the major property sectors improved. The national office vacancy rate, for example, dropped from 16.8% at the end of 2004 to 14.6% at the close of 2005. The uptick in leasing activity marked a significant departure from 2004, when sales transactions almost exclusively pumped up brokerage revenues.

This sales and leasing momentum helped the nation's top real estate brokerages post another banner year. In fact, the combined total dollar volume of sales and leasing transactions recorded by the top five brokerage firms increased from $284.8 billion in 2004 to $351.3 billion in 2005, a 23% jump, according to NREI's Top Brokerage Survey.

No change in the top spot

Once again, CB Richard Ellis captured the No. 1 ranking in this year's brokerage survey. Specifically, CBRE recorded $150.4 billion in total investment sales and leasing volume during 2005, an increase of 18% over the $127.4 billion figure notched in 2004.

CB Richard Ellis wasn't alone in boosting its performance rather dramatically between 2004 and 2005. Cushman & Wakefield — No. 2 in NREI's survey — raised its total from $52.3 billion to $69.3 billion year-over-year, a 32% increase.

According to CEO Bruce Mosler, roughly one-quarter of the firm's 2005 investment sales were tied to multifamily transactions. By comparison, says Mosler, multifamily sales represented just 17% of investment sales in 2004.

The survey rankings reveal some surprise shifts. One example: fresh off a merger with Knight Frank of London, brokerage Newmark Knight Frank of Manhattan jumped from the 14th spot to No. 4. Newmark Knight Frank recorded a combined sales and leasing volume of $41 billion in 2005. Newmark Knight Frank's climb up the rankings ladder bumped Grubb & Ellis from No. 4 to No. 5.

Leasing at last

The leasing markets did more than just improve in 2005. “They also helped drive demand for investment properties as fundamentals got even better during the year,” says Bob Bach, director of national research at Grubb & Ellis, which recorded $40 billion in combined sales and leasing transactions for the year.

Roughly 2 million non-farm payroll jobs were created during 2005, many in the office sector, which helped tighten vacancy rates in many property segments. By comparison, just 1.4 million new jobs were created in 2004.

While office vacancy posted the sharpest decline year-over-year, both industrial and multifamily markets tightened moderately. The national industrial vacancy rate closed 2005 at 8.1%, or 1.3% below its year-end 2004 level. One major factor was overflowing port traffic into West Coast shipping hubs, which helped drive demand for both warehouse and distribution space across the nation.

A different set of forces helped the apartment market post a strong year. First, a wave of condo conversion activity helped knock vacancy down from 6.7% to 5.7% in 2005. Roughly 34% of the $87 billion in apartment properties that sold last year were bought by condo converters. Job growth and net immigration helped tighten vacancy in markets such as New York, Los Angeles and Miami.

Parke M. Chapman is NREI's senior editor

TOP THREE SALES TRANSACTIONS OF 2005 (BY TOTAL SALES)
Rank Building Market Price Cap Rate (%) Buyer
1 MetLife Building (200 Park Avenue) Manhattan $1.72 billion 4.5 Tishman Speyer
2 Bank of America Center San Francisco $1.05 billion 6.3 Hudson Waterfront Associates
3 One Madison Ave. Manhattan $801.6 million 5.9 SL Green Realty Corp.
Source: Real Capital Analytics


TOP THREE LEASING DEALS OF 2005* (RANKED BY SIZE OF LEASE)
Rank Building Market Lease/sq.ft. Tenant Tenant Rep
1 4545 Fisher Road Columbus, Ohio 2.05 million Steve & Barry's University Sportswear Ohio Realty Advisors
2 8301 Industrial Blvd Philadelphia 1.02 million Wakefern Food Corp. Liberty Property Trust
3 5330 Crosswinds Dr. Columbus, Ohio 1.01 million Genco Sears n/a
*The top three leasing deals of 2005 are all industrial properties.
Source: CoStar Group


TOP 25 BROKERAGES

The Top 25 Brokerages listing is based on responses to NREI's Top Brokerage survey, which was conducted via e-mail in February and March 2006. Brokers were asked to provide the total dollar value of leasing transactions and investment sales during 2005. The totals were combined to determine the company's ranking. NREI makes every attempt to ensure the final survey is as comprehensive as possible, but some brokerages may choose not to participate.

  1. CB Richard Ellis

    Total Amount of Investment Sales & Leasing Transactions: $150.4 billion
    100 N. Sepulveda Blvd., Suite 1050
    El Segundo, CA 90245

    Phone: (310) 606-4700

    Email: info@cbre.com

    Web site: www.cbre.com

    Brett White, President/CEO; Kenneth J. Kay, CFO; Calvin W. Frese, Jr., President, Americas

  2. Cushman & Wakefield

    Total Amount of Investment Sales & Leasing Transactions: $69.3 billion
    51 W. 52nd St.
    New York, NY 10019

    Phone: (212) 841-7932

    Web site: www.cushwake.com

    Bruce Mosler, President/CEO; John Cushman, Chairman; John Santora, COO

  3. Colliers International

    Total Amount of Investment Sales & Leasing Transactions: $50.6 billion
    50 Milk St.
    Boston, MA 2109

    Phone: (617) 722-0221

    Email: kgalvin@colliers.com

    Web site: www.colliers.com

    Margaret Wigglesworth, President/CEO; David Kahnweiler, Chairman; Richard Kimball, EVP

  4. Newmark Knight Frank

    Total Amount of Investment Sales & Leasing Transactions: $41 billion
    125 Park Ave.
    New York, NY 10017

    Phone: (212) 372-2000

    Web site: www.newmarkkf.com

    Jeffrey R. Gural, Chairman; Barry M. Gosin, CEO; James D. Kuhn, President

  5. Grubb & Ellis Co.

    Total Amount of Investment Sales & Leasing Transactions: $40 billion
    2215 Sanders Rd.
    Northbrook, IL 60062

    Phone: (847) 753-7500

    Email: corporatecommunications@grubb-ellis.com

    Web site: www.grubb-ellis.com

    Mark Rose, CEO; Maureen Ehrenberg, President, Global Client Services; Robert Osbrink, President, Transaction Services

  6. Jones Lang LaSalle

    Total Amount of Investment Sales & Leasing Transactions: $35.8 billion
    200 E. Randolph Dr.
    Chicago, IL 60601

    Phone: (312) 782-5800

    Web site: www.joneslanglasalle.com

    Colin Dyer, President/CEO; Lauralee Martin, COO/CFO; Peter Roberts, CEO, Americas

  7. NAI Global

    Total Amount of Investment Sales & Leasing Transactions: $35 billion
    4 Independence Way, Suite 400
    Princeton, NJ 08540

    Phone: (609) 945-4000

    Email: mklionsky@naiglobal.com

    Web site: www.naiglobal.com

    Gerald Finn, Chairman/CEO; Jeffrey Finn, President/COO; David Blanchard, EVP

  8. ONCOR International

    Total Amount of Investment Sales & Leasing Transactions: $27.8 billion
    350 N. LaSalle, Suite 710
    Chicago, IL 60610

    Phone: (312) 527-4455

    Email: info@oncorintl.com

    Web site: www.oncorintl.com

    Charles Seufferlein, Chairman; Robert Peterson, Vice Chairman; David Matthes, President/CEO

  9. The CORE Network

    Total Amount of Investment Sales & Leasing Transactions: $25.4 billion
    15150 Preston Rd., #300
    Dallas, TX 75248

    Phone: (972) 980-3994

    Email: info@corenetwork.org

    Web site: www.corenetwork.org

    Perry S. Morita, Executive Director; Edward A. Cross II, Chairman of the Board; F. Keene Miller, Vice Chairman of the Board

  10. GVA Worldwide

    Total Amount of Investment Sales & Leasing Transactions: $22 billion
    2569 Sherman Ave., Suite 201C
    Evanston, IL 60201

    Phone: (847) 733-0883

    Email: info@gvaworldwide.com

    Web site: www.gvaworldwide.com

    Michael T. Cohen, Chairman; Michael Corbett, Vice Chairman; Betsy Baer, COO

  11. Trammell Crow Co.

    Total Amount of Investment Sales & Leasing Transactions: $21.5 billion
    2001 Ross Ave., Suite 3400
    Dallas, TX 75201

    Phone: (214) 863-3000

    Email: ir@trammellcrow.com

    Web site: www.trammellcrow.com

    Robert E. Sulentic, Chairman/CEO; Bob Shibuya, Executive Director, National Brokerage Services; Jack Minter, National Director, Capital Markets

  12. Studley

    Total Amount of Investment Sales & Leasing Transactions: $21.07 billion
    300 Park Ave., 3rd Floor
    New York, NY 10022

    Phone: (212) 326-1000

    Web site: www.studley.com

    Mitchell S. Steir, Chairman/CEO; Michael Colacino, President

  13. The Staubach Co.

    Total Amount of Investment Sales & Leasing Transactions: $21 billion
    15601 Dallas Pkwy., Suite 400
    Addison, TX 75001

    Phone: (972) 361-5000

    Web site: www.staubach.com

    Roger Staubach, Chairman/CEO; Elysia Ragusa, President/COO

  14. Marcus & Millichap

    Total Amount of Investment Sales & Leasing Transactions: $20.9 billion
    16830 Ventura Blvd., Suite 352
    Encino, CA 91436

    Phone: (818) 907-0600

    Email: jsterns1@marcusmillichap.com

    Web site: www.marcusmillichap.com

    George M. Marcus, Chairman; William A. Millichap, Chairman; Harvey E. Green, President/CEO

  15. CORFAC International — Corporate Facility Advisors

    Total Amount of Investment Sales & Leasing Transactions: $16.9 billion
    2000 N. 15th St.
    Arlington, VA 22201

    Phone: (703) 528-3500

    Email: info@corfac.com

    Web site: www.corfac.com

    David Bruce, President; John Bitzer, VP; Thomas P. Bennett, Executive Director

  16. Coldwell Banker Commercial Affiliates Inc.

    Total Amount of Investment Sales & Leasing Transactions: $14.3 billion
    1 Campus Dr.
    Parsippany, NJ 07054

    Phone: (800) 222-2162

    Email: debra.marshall@cendant.com

    Web site: www.coldwellbankercommercial.com

    Jacklene Chesler, SVP, Marketing; Frederick Schmidt, SVP, Business Development; Nancy Brown, VP, Servicing, Operations, Education & Learning

  17. TCN Worldwide

    Total Amount of Investment Sales & Leasing Transactions: $11.6 billion
    2419 Coit Rd., Suite A
    Plano, TX 75075

    Phone: (972) 769-8701

    Web site: www.tcnworldwide.com

    Ross Ford, President/CEO; Neil Siderow, Chairman; David Wagner, Vice Chairman

  18. Sperry Van Ness

    Total Amount of Investment Sales & Leasing Transactions: $10 billion
    18881 Von Karman Ave., Suite 800
    Irvine, CA 92612

    Phone: (949) 250-4100

    Web site: www.svn.com

    David Frosh, President; Rand Sperry, Co-Founder; Mark Van Ness, Co-Founder

  19. HFF (Holliday Fenoglio Fowler LP)

    Total Amount of Investment Sales & Leasing Transactions: $7.6 billion
    2000 Post Oak Blvd., Suite 2000
    Houston, TX 77056

    Phone: (713) 852-3500

    Web site: www.hfflp.com

    John H. Pelusi Jr., Executive Managing Director/Managing Member; Mark D. Gibson, Executive Managing Director; John P. Fowler, Executive Managing Director

  20. Lee & Associates

    Total Amount of Investment Sales & Leasing Transactions: $7 billion
    3991 MacArthur Blvd., Suite 100
    Newport Beach, CA 92660

    Phone: (909) 241-7904

    Web site: www.lee-associates.com

    Bill Lee, Founder; Steve Jehorek, Chair

  21. Transwestern Commercial Services

    Total Amount of Investment Sales & Leasing Transactions: $6.4 billion
    1900 W. Loop South, Suite 1300
    Houston, TX 77027

    Phone: (713) 270-7700

    Web site: www.transwestern.net

    Robert Duncan, Chairman; Larry P. Heard, President/CEO; Mark Doran, COO

  22. Century 21 Real Estate LLC

    Total Amount of Investment Sales & Leasing Transactions: $5.5 billion
    1 Campus Dr.
    Parsippany, NJ 07054

    Phone: (877) 221-2765

    Email: specialtymarkets@century21.com

    Web site: www.century21.com

    Tom Kunz, President/CEO; Jacob Stepan, COO; John Greenleaf, SVP, Marketing

  23. Voit Commercial Brokerage

    Total Amount of Investment Sales & Leasing Transactions: $3.8 billion
    21700 Oxnard St., Suite 350
    Woodland Hills, CA 91367

    Phone: (714) 978-7880

    Email: info@voitco.com

    Robert D. Voit, President, The Voit Cos.; David Allison, EVP & COO, The Voit Cos.; Robin Rousselet, CFO, The Voit Cos.

  24. Duke Realty Corp.

    Total Amount of Investment Sales & Leasing Transactions: $2.6 billion
    600 E. 96th St., Suite 100
    Indianapolis, IN 46240

    Phone: (317) 808-6000

    Email: ir@dukerealty.com

    Web site: www.dukerealty.com

    Dennis D. Oklak, Chairman/CEO; Matthew Cohoat, EVP/CFO; Robert Chapman, SEVP, Head of Real Estate Operations

  25. Molinaro Koger

    Total Amount of Investment Sales & Leasing Transactions: $2.2 billion
    1676 International Dr., Suite 575
    McLean, VA 22102

    Phone: (703) 760-9600

    Email: slemon@mkhotels.com

    Web site: www.mkhotels.com

    Robert Koger, President; Ed Blum, Managing Director, Capital Markets; Eric Kudlak, Managing Director, Europe