Commercial property deals in the U.S. rose 6.7 percent in the first quarter compared to last year, but the industry is still facing several issues.
Higher interest rates and lower demand for office and retail real estate will be problems for the market going forward, according to a Ten-X Commercial study cited by Bloomberg. And while volume was up year-over-year in the first quarter at $107 billion, it still dropped by 14 percent compared to the fourth quarter of 2017.
Commercial property prices gained just 0.1 percent between March and April and dropped 1.4 percent from the previous year, the first time the Ten-X pricing metric dropped below its level from a year earlier.
The study also found that gains in the hotel and industrial sectors were not strong enough to offset declines in apartment, office and retail deals. Demand for warehouse space has still been high thanks to online shopping.
In New York City, dollar volume for closed investment sales for the year totaled $34.9 billion — down nearly 40 percent from $57.8 billion in 2016, Cushman & Wakefield data showed. [Bloomberg] – Eddie Small