RCA Insights

Macroeconomic Concerns Continue to Hold Back Volume

By on June 15th, 2016

Transaction volume fell in May with preliminary figures suggesting a 38% YOY decline in sales. There will be revisions to this data by next week, but likely only on the order of 2% to 3%.

There is a glimmer of light in the office sector with deal volume up 2% from last year on sales of $10.1 billion. The lack of portfolio and entity-level deals for this sector in May 2015 makes the hurdle from last year easier to overcome. By contrast, deal volume in the industrial sector was down 66% YOY in May, but nearly two thirds of activity in May last year was tied up in such megadeals.

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Next week Real Capital Analytics publishes its US Capital Trends reports for May. The Big Picture report will discuss the macroeconomic and global issues weighing down the market.

Jim Costello

Jim Costello

Senior Vice President
jcostello@rcanalytics.com

Jim Costello has worked in the CRE space on issues of urban economics since 1990, including a 20-year stint at Torto Wheaton Research. Jim expanded the reach of the Torto Wheaton Research team developing forecasts of global market fundamentals. He also developed approaches to pair the forecast results with frameworks to answer investor questions on asset values and relative investment opportunities.

In the aftermath of the Global Financial Crisis, Jim provided advice to the Treasury Department and helped educate these professionals on commercial real estate performance. Jim is a member of the Commercial Board of Governors of the Mortgage Bankers Administration, where he helps policy makers understand the commercial real estate industry.

Jim is expanding the capabilities of the Real Capital Analytics team on issues of real estate market dynamics. Jim has a master’s degree in economics and is a member of the Counselors of Real Estate.