Commercial Real Estate Investment Hit Record Levels
Favorable Fundamentals Drove Record CRE Transactions
- Elevated market liquidity, strong property outlooks and inflation resistance drew many investors to CRE properties
- CRE transactions in 2021 exceeded prior peak by 29%; 1Q 2022 sales activity ahead of prior year
- Placing downward pressure on cap rates
Aggressive Acquisition Climate Fueling Price Surge
- Office, MT-Retail and Hotels, which were hard-hit but are starting to recover, saw modest price growth
- Strong demographic trends and favorable outlooks drove strong price appreciation for Apartment and Self-Storage
- Record transactions fueled outsized Industrial price gains
Will CRE Transactions Maintain Their Momentum?
- Strong CRE outlook will continue to support property space demand
- Stock market volatility may push capital to CRE, sustaining further buyer demand
- Fast rising interest rates could erode some sales activity
*Pre-Pandemic period: 2019 through 1Q 2022; MT=Multi-Tenant
Includes sales $1 million and greater
Sources: Marcus & Millichap Research Services, Real Capital Analytics, CoStar Group, Inc.
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