Over the last three years, Los Angeles has led the world in commercial property deals, despite a slowdown in global spending.
More than $96 billion of commercial property deals of $5 million or more, not including land and entity-level transactions, took place in Los Angeles from 2021 through last year, CoStar News reported, citing a global study from JLL.
After L.A. in the top spot, Dallas followed with $91.2 billion in deals, then New York with $80.7 billion and London at $77.9 billion.
Paris ranked sixth and Phoenix seventh, JLL’s Global Real Estate Perspective report found.
“The cities have emerged as top global markets for direct investments due to factors such as thriving industries, strategic locations, favorable business environments and economic growth, attracting significant investments,” JLL said in an email to CoStar News.
It’s not clear if JLL defined Los Angeles as a city, county or metropolitan region stretching out to the Inland Empire, a growing hub for logistics warehouses.
Last year, global commercial property deals totaled $594 billion, a 44 percent drop from 2022 — the lowest direct investment, including cross-border transactions, in more than 10 years, according to JLL.
Global commercial spending dropped because higher interest rates and capital costs led to a gap between what sellers sought for properties and what buyers were willing to pay, JLL said.
At the same time, capital raising for closed-end funds that make real estate purchases fell to $142 billion, a 28 percent drop from to 2022, according to the brokerage.
This year, market conditions have stabilized, with some property sectors showing momentum, according to the Chicago-based firm.
While “pricing and liquidity for office assets are under pressure, amid weak global sentiment from investors and lenders,” interest in logistics, residential and select alternative growth sectors remains strong, according to the report.
JLL plans to discuss cross-border investment during a panel in France this week at Mipim, the world’s biggest annual real estate event.
— Dana Bartholomew