RCA Insights

2019 Is Almost Over. How Does It Measure Up?

By on December 12th, 2019

There is just one more week or so for big deals to close in 2019, but the U.S. market is largely shutting down at this point, with annual holiday parties in abundance. Deal volume for 2019 is likely not going to surpass that of 2018, though it will be at a healthy level.

We can make that statement because one of the defining characteristics of the market in 2019 has been a paucity of entity-level transactions. Such M&A-type deals accounted for 13% of all deal activity in 2018, but so far have accounted for only 2% of sales in 2019. Without the outsized boost from such deals, it is more difficult for total activity to grow.

Sure, the trend in overall activity for the year through October looks close to what was happening a year prior. Sorry to say though, that preliminary figures for November suggest another year-over-year decline in deal volume. We could be wrong. A few big deals could close by next week and push 2019 over the top, but that would be a surprise.

To the extent, though, that there are pending entity-level deals which may close before year-end, the industrial sector would be the hands-on-favorite for investors. Our data shows that there are industrial entity-level deals in the pipeline which may price out at $11.7 billion.

The pace of deal activity in the industrial sector is ahead of the pace set in 2018 at this point. However, this outperformance is not because of entity-level deals but major portfolio sales. Blackstone engineered the largest non-M&A deals ever recorded in September, which put industrial deal activity for the year onto a record trajectory.

Switching back to the entity-level deals, across all sectors such transactions that are pending should price out at $18.5 billion. That is a hefty figure for sure, but even if all these transactions close, entity-level transactions for the year would only total $26.8 billion. By contrast, such transactions totaled $73.7 billion for 2018. Even though portfolio sales are up from 2018, the falloff in entity-level volume looks to be enough to drag the combination of all these megadeals down for the year.

Next week in the final edition of US Capital Trends for 2019, we will examine the defining influences for the commercial property market heading into 2020.


On December 18 Real Capital Analytics releases the new edition of US Capital Trends, addressing the key issues for the commercial real estate market in the coming year. We will also review deal volume and pricing trends for November, including a first look at the RCA CPPI results.

Also on RCA Insights:

What’s Wrong in Chicagoland?

US Prices Climb in October; Deal Volume Wavers

Jim Costello

Jim Costello

Senior Vice President

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.