February 28, 2018
The latest research from Ten-X Commercial reveals that that CRE transaction volume edged down to $117.4 billion in Q4 2017, a 0.5% decline from last quarter. The Commercial Real Estate Volume & Pricing Trends report finds that fourth-quarter investment activity plunged by 13.2%, while the annual figured dropped a more modest 6.9% to $445.2 billion.
Ten-X notes, deal activity may have been slowed by the looming specter of tax reform, which prompted investors to delay transaction closings until the new, advantageous legislation took effect in 2018. Persistent concern about the age of the U.S. economic expansion, which is now in its 104th month, also hampered deal flow as it’s approaching the second longest expansion period in modern U.S. history. This concern has created a pricing gap between sellers and the many buyers who are wary about purchasing property at tight cap rates so late in the real estate cycle.
The minor quarter-on-quarter decline is attributable to a $6.7 billion drop in deal volume in the industrial sector, and follows after two quarters of growth. Despite the decline in deal volume, the recently-released Ten-X Industrial Nowcast posted the largest increase in February, with pricing rising by 1%.
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