Second-quarter commercial real estate sales transaction volume was down approximately 50% from the same period in 2019, but remained unchanged sequentially, according to Green Street. Year-to-date transaction volumes are now consistent with longer-term averages, though still significantly lower than last year’s pace.
Danile Ismail, co-head of strategic research at Green Street commented: “Broader macro conditions are not conducive to CRE transactions currently. Credit availability has tightened and this combined with higher interest costs, a persistent wide bid/ask spread and the absence of forced sellers is restricting deal flow.” He added that “The decline remains fairly widespread as no markets appear to have escaped substantial slowdown in activity levels. Office properties have demonstrated the most pronounced drops – particularly in cities such as Houston TX., New York City NY., and Atlanta GA – relative to estimated market value while apartments and strip centers stand out for their steep year over year volume decreases.” Despite cyclical headwinds REIT M&A has increased during Q3 2020 along with major deals within office buildings & industrial spaces providing guidance on values & some optimism for investors moving forward.
