Private real estate investment deals tumble worldwide

In North America, the number of deals drop 34% in March from the year before, and April has been worse

TRD NATIONAL /
Apr.April 16, 2020 05:35 PM
Global private real estate investment continues to fall as the coronavirus continues to force economics to a standstill. (Credit: iStock)

Global private real estate investment continues to fall as the coronavirus continues to force economics to a standstill. (Credit: iStock)

The number of private real estate investment deals plunged worldwide last month, the latest example of the coronavirus’ all-consuming effect on the global economy. And so far, April has been even worse.

Commercial real estate deals were down nearly 43 percent in March year over year, according to data from research firm Preqin. North America was essentially the same with a 44 percent drop.

(Credit: Preqin)

(Credit: Preqin)

In April, deal volume on the continent has cratered nearly 67 percent.

The drop has tracked with the pandemic’s spread across the globe. There were 495 deals globally in March, down from 588 the month before, according to Preqin. And in April, just 160 deals have been done.

In Asia, where the coronavirus originated — it was first reported in China in late December — just two deals were completed in March, compared to seven the month prior. Preqin did not provide total dollar amounts for the deals.

Commercial real estate research firm Real Capital Analytics on Thursday also reported drops in commercial real estate investment activity. By dollar amount, deal volume for transactions $10 million or higher dipped 1 percent for the Americas for the first 13 weeks of 2020 compared to last year. In Europe, the Middle East and Africa, volume was 18 percent lower; and in Asia, it was down 56 percent.

But it’s likely that the worst is yet to come.

RCA said the impact of the pandemic is expected to become more evident in the second quarter for the Americas, Europe, the Middle East and Africa because “large-scale shutdowns only began to occur in these regions in early March.” In the post accompanying its findings, RCA added that “transactions are typically in progress for several months before completion.

In New York last week, there were no mid-market investment sales uploaded to city records.

“Anytime there’s uncertainty in the market, if something is not a must sell or a must buy, people are going to take their time and take a step back,” one New York-based broker told The Real Deal at the time. “Because they want to measure twice and cut once.”
Pre-coronavirus, private equity real estate funds were already on pace for a slowdown. Those funds closed $18 billion in the fourth quarter of 2019, the slowest quarter since 2013 and down from $47 billion from the prior quarter.

Write to Mary Diduch at [email protected]


Related Articles

arrow_forward_ios
Blackstone's Jonathan Gray, Madison Realty Capital's Josh Zegen (Getty; Madison; iStock)

Property debt investors raising money but still looking for distress

Property debt investors raising money but still looking for distress
Spencer Rascoff and Zillow CEO Rich Barton (Getty; iStock)

Spencer Rascoff says Zillow IPO was “facepalm” moment

Spencer Rascoff says Zillow IPO was “facepalm” moment
Shadow Ventures CEO KP Reddy (Linkedin)

Shadow Ventures launches crowdfunding for proptech startups

Shadow Ventures launches crowdfunding for proptech startups
Subversive CEO Richard Acosta (Photos via ICSC; iStock)

Riding high: Inception, Subversive to launch publicly traded cannabis REIT

Riding high: Inception, Subversive to launch publicly traded cannabis REIT
The Internal Revenue Service is going after foreign real estate investors as part of a broader sweep to collect revenues amid the pandemic.  (iStock)

“There’s a lot of money to be made”: IRS targets foreign real estate investors

“There’s a lot of money to be made”: IRS targets foreign real estate investors
Gary Offner of Nasdaq Ventures (inset) and Dealpath's Mike Sroka (Linkedin, Google Maps, Dealpath)

Nasdaq’s VC arm invests in proptech startup Dealpath

Nasdaq’s VC arm invests in proptech startup Dealpath
Alfred CEO Marcela Sapone and Adam Neumann (Getty)

Adam Neumann returns with $30M investment in residential startup

Adam Neumann returns with $30M investment in residential startup
Magna CEO Robert Indeglia with the Courtyard by Marriott 307 West 37th Street and the Fairfield Inn & Suites at 325 West 33rd Street (Google; Magna)

Magna Hospitality emerges as New York’s hotel vulture

Magna Hospitality emerges as New York’s hotel vulture
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...