Q4 Single-Asset & Portfolio Investment Volume Sets Record

  • Q4 investment volume1 fell by 8.1% year-over-year to $152.7 billion. Excluding volatile entity-level deals, volume was $150.7 billion—the highest quarterly total of single-asset and portfolio sales on record. Entity-level transactions slowed sharply from 2018, particularly for retail and industrial assets.
  • Investment volume for full-year 2019 decreased by 1.8% to $542.4 billion due to an 86% decline in entity-level deals. Entity-level deals accounted for 2% of total volume, down from 13% in 2018.
  • Portfolio and single-asset investment volumes increased year-over-year both in Q4 and for the full year, led by a surge in industrial single-asset and portfolio volume. Single-asset volume increased for all sectors except hotel (-5.2%) in 2019.
  • Cross-border investment decreased by 54.0% in 2019, largely due to a decrease in entity-level and retail sales as well as declines in capital from Canada and mainland China—two major sources in recent years. Excluding entity-level deals, cross-border investment decreased by a more moderate 12.1%.
  • Fast-growing tech-driven and Sun Belt markets continued to attract strong investor interest in 2019. Seattle, Austin, Charlotte, Boston, Portland and the San Francisco Bay Area registered the strongest growth in investment volume, ranging from 17% to 54%.
  • Cap rates largely remained stable in H2 2019, according to CBRE’s Cap Rate Survey. Industrial, suburban multifamily and suburban office posted the largest decreases from H1. Power centers and high-street retail were the only segments with modest increases of 8 and 2 basis points (bps), respectively.
  • CMBS issuance was robust in 2019, particularly in Q4, resulting in the highest annual total since 2007. Fannie and Freddie lending activity increased by 7.3% and 0.5%, respectively, for the year. Life company lending decreased by 7.6% through the first three quarters (latest data available) compared with the year-earlier period.
  • Delinquency rates were low across lender categories. Although still the highest, the CMBS delinquency rate decreased by more than half over the past two years to 2.29% in Q3 (latest data available).

1All references to deal volume cited in this report are based on Real Capital Analytics transactional database, which includes entity-level and excludes development site transactions.