October 11, 2018
Led by multifamily and industrial investments and buoyed by a 44% increase in hotel sales, U.S. commercial real estate transaction volume exceeded expectations in the first half of the year, according to research by JLL Capital Markets. Closed purchases increased 3.4% to reach $194.9 billion H1.
JLL’s Sean Coghlan says, “As the cycle continues to press on, investors are displaying appetite for the commercial real estate sector. Pockets of the market are seeing exceptional manifestations of liquidity with investors in pursuit of scale and market share. With the economic outlook and commercial real estate fundamentals remaining favorable, we now expect volumes to be down just 5% year-over-year.”
The strong first half showing means that transaction volume for 2018 is likely to be higher than many observers expected at the beginning of the year. Transaction volume last year was down 8% over 2016.
Among other JLL findings:
– investors continue to raise more funds allocated to real estate
– it is becoming increasingly difficult to deploy capital in what has become a lower-yielding market overall
– multifamily assets continued to be the most popular, with $66.2 billion in transaction volume
– multifamily sector experienced a more than 10% increase in transaction activity H1
– hotel sector saw the highest growth rate in liquidity, at 44%
– industrial assets saw an 18.3% increase in transaction activity, with $30.5 billion traded
– office assets saw $54.4 billion in transactions, representing a year-over-year decrease of 12.9%
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