International buyers boost overall U.S. investment volume

  • Commercial real estate investment volume rose 17.4% year-over-year to $152.7 billion in Q3. Total year-to-date investment was $394.2 billion, a sizable increase of 10.6% from the first three quarters of 2017. 
  • Excluding entity-level transactions, which is a better way to gauge the velocity of transactions, year-to-date investment volume was still up by 5.5% from last year to $351.6 billion and Q3 volume was up by 6.8% year-over-year to $122.8 billion.
  • Greater New York, Greater Los Angeles and the San Francisco Bay Area attracted the most investment in Q3, accounting for 24.5% of all acquisitions. The top-15 markets accounted for nearly 61.4% of total Q3 investment volume.
  • Industrial, hotel and multifamily cap rates decreased modestly year-over-year in Q3, while office and retail cap rates were essentially unchanged. Industrial cap rates remained lower than office for the fourth consecutive quarter, a new record. 
  • Pricing for all property types except retail is at an all-time high, with mild deceleration in recent months. Increases in multifamily and office pricing continue to lead the national index, while industrial continues to have decelerating growth. 
  • Overall, commercial mortgage production year-to-date is slightly softer than in 2017, with combined CMBS and GSE lending down by 3%. CBRE’s Lender Momentum Index is up 13.1% year-over-year.