US commercial real estate sales sink in February

Compared with last year’s $47.3B, just $25.1B worth of property changed hands

Mar.March 22, 2016 11:51 AM

UPDATED, March 22, 4:44 p.m.: U.S. commercial real estate sales took a dive last month in what may be the clearest sign that six years of growth is leveling off.

In February, $25.1 billion worth of commercial property was sold compared with $47.3 billion in February 2015, according to Real Capital Analytics.

Sales were $46.2 billion in January, the Wall Street Journal reported.

Since 2009, prices for apartment complexes, office buildings, stores and other commercial property climbed, but there are indications that they are now falling in certain sectors, according to the Journal.

“Clearly there has been a plateauing,” Jonathan Gray, global head of real estate for Blackstone Group, told the Journal.

Real estate research and advisory firm Green Street Advisors compiled an index of hotel values and found it was 10 percent lower in February than during the same time last year. The dip was partly because of reduced international travel last month.

Green Street’s broad valuation index was 8.7 percent higher in February than a year earlier. However, the previous year the index increased 11 percent, the Journal reported.

Still, Gray emphasized to the Journal that the market is healthier than before the crash and “it’s too early to call the end of the cycle.”

While volume sales nationwide dipped, in Manhattan, commercial real estate property activity is on the same level as early 2014, albeit down from last year.  In January and February 2015, there was a combined $11.2 billion in sales, compared with $6.7 billion during the same time period this year, according to Real Capital Analytics. [WSJ]Dusica Sue Malesevic

Correction: An earlier post misstated the amount of sales for January and February in millions, when it should be billions.

Related Articles

Brookfield Asset Management CEO Bruce Flatt

“We underwrite every investment like we’re going to hit a recession”: Brookfield CEO

Cadre founder Ryan Williams and Allen Smith

Cadre brings on former Four Seasons CEO as president

AKS Capital Partners Managing Partners Aaron Appel and Walker & Dunlop CEO Willy Walker

Walker & Dunlop acquires Aaron Appel’s AKS Capital Partners

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

250th Issue

The Real Deal celebrates 250 issues

Neir’s Tavern (Credit: Google Maps)

City’s oldest bar, of “Goodfellas” fame, gets last-minute lifeline

Neir's Tavern (Credit: Google Maps)

Landlord to bar owner: You don’t have to go home but you can’t stay here