Investment activity in the US commercial real estate sector has fallen back during the third quarter of the year, new research shows. Bloomberg cited the preliminary figures released by Real Capital Analytics, which revealed that the overall value of transactions in the market dropped by 15 per cent between July and September, compared to the previous three-month period.
The firm noted that this is the largest quarterly decline since the first three months of 2009. In total, some USD 49.8 billion (GBP 31.61 billion) of commercial property deals took place in the third quarter, a drop from the USD 58.5 billion recorded between April and June. However, despite the quarterly decline, Real Capital Analytics pointed out that the US commercial property market is performing much better than it was a year ago. Transactions for offices, hotels, apartments, shopping centres and industrial premises were 39 per cent higher than in the same period in 2010, the company stated.
Meanwhile, a study published earlier this month by Cushman & Wakefield noted that New York in particular is performing well in the global commercial property sector. The city attracted more investment than any other location during the third quarter of 2011, experiencing a 165 per cent rise in the amount of money being ploughed into such assets in the 12 months leading up to September. The firm noted that many investors are concentrating on prime markets due to the wider uncertainty in global economies.
Speaking to Bloomberg, professor of real estate and urban land economies at the University of Wisconsin's business school Stephen Malpezzi described the US and global economies as being on "shaky ground". He warned that there is still a way to go before it rebounds fully, commenting: "Commercial real estate doesn't exist in a vacuum and it's only going to recover to the extent there's confidence amongst businesses - the users of commercial real estate - and that in turn depends on the consumer."
- Friday 21 October 2011