2019 Has Second-Highest Q3 Investment Volume on Record

  • Commercial real estate investment volume1 decreased by 6.6% year-over-year in Q3 to $143.1 billion due to a sharp drop in entity-level deals. However, individual-asset sales were up slightly to $96.1 billion, remaining near cyclical-high levels. Portfolio sales volume surged 51.4% year-over-year, driven by Blackstone's $18.7 billion acquisition of GLP's U.S. industrial portfolio.
  • 2019 had the second-highest Q3 investment volume on record, after Q3 2018’s $153.2 billion.
  • Industrial investment volume increased by 63.2% year-over-year, largely due to the GLP portfolio acquisition by Blackstone. Sales volume for individual industrial assets was up by 13.8% year-over-year—the largest increase among the sectors. Retail volume decreased by 55.7% year-over-year, primarily due a sharp decline in entity-level and portfolio deals like Brookfield's $15 billion acquisition of GGP last year. Individual-retail-asset volume was unchanged.
  • Many tech-driven markets ranked among the top metros for year-over-year growth in investment volume for the four quarters ending Q3 2019. Boston, the San Francisco Bay Area, Austin, Seattle and Raleigh-Durham registered growth rates of between 13% and 63%, compared with the U.S. rate of 6.4% during the same period.
  • Industrial cap rates decreased by 28 bps year-over-year in Q3, by far the largest decrease among the sectors. Changes for the other sectors ranged from a 10-bp decrease for multifamily to an 8-bp increase for retail. Cap rate spreads to the 10-year Treasury increased for all sectors and subsectors, as the 10-year Treasury yield decreased by nearly 140 bps from Q3 2018.
  • Freddie Mac lending surged by 63.8% year-over-year in Q3. CMBS issuance was on pace with year-earlier levels year-to-date through Q3, while life company lending was down year-over-year in both Q2 (latest data available) and year-to-date.

1Deal volume in this report is based on Real Capital Analytics transactional data and includes entity-level transactions unless otherwise noted, but excludes development site transactions.