April 20, 2018
After five consecutive quarters in which U.S. deal volume activity declined, Real Capital Analytics (RCA) reports the slide appears to have ended in Q1 2018. Preliminary figures compiled by RCA suggest that volume grew 1% from the same period a year earlier.
RCA’s CRE economist Jim Costello points out the apartment sector led the pack in terms of total deal volume for the quarter, though the industrial and hotel sectors grew at a faster pace. Both office and retail sector activity declined.
The sale of individual assets buoyed deal volume. Costello notes, “These deals represent the bedrock of the market in that investors underwrite the performance of individual assets based on local factors driving property income, and not broader financing changes which can drive portfolio and entity-level deals. The level of activity for those financing-driven megadeals fell in the quarter.”
Manhattan drove sales activity growth in the quarter, after recent sluggishness that burdened activity nationally. Manhattan recorded 13 large property sales ($250-million+) in Q1 2018. By comparison that number was just four in Q1 2017.
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