Exit and Growth Strategies for Middle Market Businesses

M&A News In The Commercial Real Estate Industry Sector

By Peter Moore | Feb 28, 2018

The report below gives a good overview of the first quarter M&A activity in the Commercial Real Estate Industry Sector.

Deal volume and prices increased yearly from Q3’11 through to Q3’16, but that was not the case in 2017. In the commercial real estate sector in 2017, increasing prices showed owners looking to hold onto assets with a focus more on cashflow (cap. rates) than a large pay out at disposition.

The trend of foreign buyers looking to invest in U.S. commercial real estate continued in 2017. According to data from the National Association of Realtors, the top countries of origin for foreign buyers included China, Mexico, the United Kingdom and Venezuela.


Industry Indicators

  • US corporate profits, an indicator of commercial real estate demand, rose 5.4% in the third quarter of 2017 compared to the same period in 2016.
  • The bank prime loan rate, which indicates changes in the rates available for real estate financing, was 4.25% as of the week ending December 12, 2017, up from a rate of 3.5% the same week in 2016.
  • The value of US nonresidential construction spending, a driver for commercial real estate brokerage demand, dropped 0.4% year-to-date in October 2017 compared to the same period in 2016.

Posted by Peter Moore.

Read the Entire Commercial Real Estate M&A 1st Quarter Newsletter Here

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