May 11, 2018
Transaction volumes exceeded expectations in Q1 2018 with 4.7% year-over-year growth, according to JLL’s “Q1 2018 United States Investment Quick Look.” In total, $98.7 billion in trades transpired across commercial real estate, with the industrial, multifamily and hotel sectors outperforming and driving growth. Yet, JLL notes, selectivity prevails and investors remain disciplined.
JLL’s Jonathan Geanakos says, “The U.S. economic outlook is increasingly favorable. However, we expect overall investment into commercial real estate in 2018 to decline in favor of debt and M&A as underwriting remains disciplined.”
– Industrial sector outperformed the broader market by dollar volume, with first quarter activity increasing 20.8% year-over-year to $15.9 billion, marking the second strongest start to a year on record for the sector
– Hotel sector experienced transaction volume growth of 78% year-over-year, boosted by portfolio activity and ongoing interest from offshore investors
– Multifamily transaction volume surged again, growing 32.2% year-to-date and leading all sectors for the fifth consecutive quarter at $33.7 billion
– Office sector posted a 5.6% softening in volume, as the prolonged period of cap rate compression is testing investors’ ability to achieve yield
– Retail investment declined notably, large in-progress portfolios are expected to considerably boost full-year activity.
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