May 12, 2017
The U.S. CRE investment market remained hung in April, at least that’s the view of Real Capital Analytics’ Jim Costello. The real estate economist says early deal volume numbers reveal another high double-digit percentage decrease compared to a year ago, with pricing remaining generally flat.
Headline cap rate figures appear to defy the flat pricing perception, though. Average office cap rates are up 20 bps from last October. There’s growing office deal volume in the higher cap rate non-major metros, even as deal volume falls in the low cap rate six major metros.
Costello notes the overall falling deal volume is a result of a shift in deal activity to markets less aggressively priced. The office sector experienced the shallowest deal volume decline. Sharp declines in the mid- and high-rise segments of the apartment sector appear to be moderating.
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