Exit and Growth Strategies for Middle Market Businesses

M&A News In The Commercial Real Estate Industry Sector

By Peter Moore | Feb 06, 2019

The report below gives a good overview of the first quarter M&A activity in the Commercial Real Estate Industry Sector. According to data released by Ten-X Commercial, a leading transaction platform for commercial real estate, commercial real estate transaction volume totaled $143.9 billion in the third quarter, up 24.6% from the second quarter and 22% from the prior year.

Retail real estate sector deal volume increased to $20.7 billion following a two-year decline. The bump marks its highest total since late 2014, driving increases in overall transaction volume. Office and apartment transaction volume accounted for a combined 58.1% of third quarter deal volume after climbing 15.3% and 14.2% from a year ago. Retail transaction volume saw the greatest year-over-year increase by 90% to $28.4 billion, the highest level on record.

Industry Indicators

  • US corporate profits, an indicator of commercial real estate demand, rose 10.3% in the third quarter of 2018 compared to the same period in 2017.
  • The bank prime loan rate, which indicates changes in the rates available for real estate financing, was 5.25% as of the week of December 12, 2018, up from a rate of 4.5% the same week in 2017.
  • The value of US nonresidential construction spending, a demand indicator for real estate, rose 5.2% year-to-date in October 2018 compared to the same period in 2017.
  • The value of US residential construction spending, a key indicator of real estate demand, rose 4.9% year-to-date in October 2018 compared to the same period in 2017.

Posted by Peter Moore.

Read the Entire Commercial Real Estate 1st Quarter Newsletter Here

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