By Jim Costello on January 10th, 2018
The price impacts behind the pullback in U.S. deal volume can be thought about in a supply-versus-demand context. Every asset in the market is for sale at some price level and volume is down as buyers and sellers are too far apart on prices to incentivize owners to sell.
Deal volume and prices moved up every year from Q3’11 through to Q3’16 as buyer aggressiveness and willingness to accept lower yields grew. Into 2017 though, sellers were simply less willing to part with assets. Even though buyers were less aggressive, with fewer quality assets being supplied prices grew.
This chart first appeared in US Capital Trends on Dec. 20. The next edition of US Capital Trends, which reviews fourth quarter and full year 2017 volume and pricing, will be published on Jan. 24.