IRVINE, Calif.–While some forecasts are calling for a softening in the commercial real estate market, Ten-X said its Commercial Real Estate (CRE) Capital Trends report found that CRE capital markets activity – especially how it pertains to transaction volume – reached a new cyclical high in Q4, 2015.
The total deal volume for the five major CRE sectors reached $150.3 billion, which amounts to a 20.2% increase from a year ago, the company said. The Q4 sales figures represent the highest quarterly total since the recession hit and a sign of recovery after a sluggish previous two quarters, it added.
“While a slowdown in CRE was evident after we saw drops in sales volume across the second and third quarter of 2015, a fourth quarter spike in deals lends evidence to increasing confidence in the U.S. real estate market,” said Ten-X Chief Economist Peter Muoio in a statement. “All five CRE sectors saw quarterly increases in deal volume, thanks to the strengthening U.S. dollar and the typical fourth quarter rush among investors to complete deals by the end of the year.”
According to Ten-X, the apartment, industrial, hotel and office sectors each hit all-time pricing peaks, while retail prices were 1.6% below their pre-recession peak. Prices were higher than their prior cyclical peaks for apartment (35.3%), industrial (3.4%) and office (20.4%). The office sector enjoyed pricing growth even a with a split between the growth of central business district (CBD) assets and suburban subsets: CBD office was 51.3% higher than pre-recession peak pricing, while the suburban office subset remained 8.7% below its prior cyclical peak, the company’s analysis found.