Investment Volume Hits Highest Q2 Total Since 2015

  • Commercial real estate investment volume1 of $121.5 billion in Q2 increased by 3.4% year-over-year and was the highest Q2 total since 2015. Individual asset sales volume increased by 9.3% to $91.2 billion, the highest Q2 total since at least 2004 (the earliest data available) and more than offsetting the decrease in entity-level deals from very high levels in 2018.
  • Among the major property types, office registered the largest annual increase in volume (30.5%), followed by multifamily (20.6%). Total industrial volume decreased, but individual industrial asset sales volume was up by 2.7% year-over-year. Individual asset sales of retail and hotels both decreased by a smaller amount than overall volumes.
  • Among the top-20 markets for investment volume, the strongest year-over-year increases compared with the previous 12-month period occurred in tech markets (Boston, Austin, the San Francisco Bay Area, Seattle) and in fast-growing Sun Belt markets (Charlotte and Tampa). For the U.S. overall, trailing 12-month volume increased by 12% year-over-year.
  • Cap rates were largely stable, changing by less than 10 bps in either direction across all property types in H1 2019. The 70-bp decrease in the 10-year Treasury yield so far this year resulted in wider spreads for all sectors.
  • Mortgage production remained healthy in H1 2019, with increased volume year-over-year for CMBS, Fannie Mae and Freddie Mac.

1 Deal volume in this report is based on Real Capital Analytics transactional data and includes entity-level transactions but excludes development site transactions.