By Jim Costello on April 15th, 2016
U.S. commercial property sales fell in the first quarter, with preliminary data showing deal volume came in at $101 billion, down 27% from a year earlier. Despite this fall in volume, pricing is still holding fairly steady.
Preliminary figures show that Q1’16 portfolio and entity-level deals came in at $33.6 billion, down 36% from Q1’15, which was the second strongest Q1 on record. The sale of individual assets also fell, with preliminary volume down 21% at $67.5 billion.
Volume and pricing normally move with one another but there is a disconnect in these two measures for 2016 so far, with Q1’16 cap rates standing largely at the same levels as one year earlier. This break between pricing and volume suggests not a collapse in activity but a market pause, with buyers and sellers moving further apart on pricing expectations.
Next week Real Capital Analytics will publish its US Capital Trends reports which will further detail trends in deal activity and examine the source of weakness in commercial real estate sales.
Additionally, look for our next posts on the key highlights from the Q1’16 editions of Europe Capital Trends and Global Capital Trends.