The Real Deal New York

Commercial property sales hit near
record-breaking total of $562B last year

Total was roughly $8B less than 2015’s record
February 05, 2019 12:30PM

Brookfield’s Manhattan West

Commercial real estate sales hit near-record levels in 2018, and low interest rates could make for another strong year.

The total value of U.S. commercial properties selling for $2.5 million or more reached $562.1 billion last year, the Wall Street Journal reported, citing data from Real Capital Analytics. This was a 15 percent increase compared to 2017 and about $8 billion less than the 2015 record of $569.9 billion.

Property prices increased by 6.2 percent year over year and are now 30 percent above 2007 levels. Those figures could have been higher were it not for concerns about rising interest rates, according to the report. The Federal Reserve’s recent announcement that it would keep these rates steady could help bolster the market going forward.

Some of last year’s largest portfolio deals came from private fund managers. For instance, Brookfield Asset Management acquired GGP and Forest City Realty Trust,  and Blackstone Group took over Gramercy Property Trust.

Ariel Property Advisors president Shimon Shkury told the Journal the amount of money investors had to work with was helping prices increase.

“There’s still a lot of capital out there chasing deals,” he said. “When you have less inventory to choose from, you’re going to be a little bit more aggressive on pricing.” [WSJ] – Eddie Small