Commercial deal volume driven by mergers/takeovers
The U.S. commercial property market recorded near-record sales volume in 2018, but
much of that was driven by so-called entity-level transactions, where one company
acquires a portfolio of assets through a merger or acquisition, according to Real Capital
Analytics (RCA). Entity-level deal volume totaled around $68.5 billion, representing
roughly 12 percent of the commercial volume, according to preliminary numbers
reported by RCA. This was $5 billion higher than the previous high-water mark in 2015.
RCA said sales of individual assets were comparable to 2017 levels. The volume of
single-asset sales fell in the final quarter of the year and slowed considerably in December.
Major investors plan to boost commercial-property
Institutional investors expect to allocate a slightly greater percentage for investments
in commercial real estate in the future, the Pension Real Estate Association (PREA)
reported. Major investors, such as large banks, insurance companies, pension funds and
real estate investment trusts, plan to invest 10. 4 percent of their capital in real estate
rather than other investments, a PREA survey released in early 2019 found. Currently,
major investors target about 10.2 percent of their capital on real estate.
Amazon move will boost NYC rents
Amazon’s decision to locate one of its new headquarters in Queens will boost apartment rents in New York City through 2022, but not significantly, according to Reis Inc.
Apartment rents were forecast to rise in Queens by 6. 9 percent annually in 2022.
Without the Amazon move, annual apartment rents were forecast to rise in Queens by
2.1 percent in 2022. Reis also forecast that annual rents will rise in 2022 by 5 percent in
Brooklyn, 3. 7 percent in Manhattan and 3. 9 percent in the Bronx. An expected surge in
apartment building in the metro area should help control rent-price growth, Reis said.
Freddie Mac posts record multifamily volume
Freddie Mac, the nation’s largest financier of multifamily units, closed on $78 billion in
financing in the multifamily space in 2018, up from $73.2 billion in 2017, the company
announced. Its top participating lender was CBRE at $13.7 billion in volume, followed
by Berkadia ($9.7 billion) and HFF, ($7.2 billion). The $78 billion financed roughly 860,000
Commercial-property deals should increase in early 2019
Commercial sales-transaction activity is expected to pick up steam in the early part
of 2019 after a lull toward the end of last year, according to Avison Young, a commercial real estate services company. The company said activity was “uncharacteristically
tilted” toward the early part of 2018, a likely result of economic volatility, but that an
uptick in transaction volume was expected with new-lender allocations and the availability of transitional debt. The company also predicted that institutional investors
would be more active in the market for smaller properties priced under $30 million. n
By Victor Whitman
The average monthly rent for a multifamily
unit in December 2018, up 3.2 percent
year over year
Source: Yardi Matrix
The U. S. national office-vacancy rate, based
on year-end 2018 tracking data from 46 U. S.
markets — up 20 basis points year over year
Source: Avison Young
The annual gain in 2018 in the appraised
value of investment-grade industrial assets
held by real estate investment trusts, the
largest increase among commercial-property
Source: Green Street Advisors