Commercial Real Estate Shows Warning Signs Despite Record Performance
As the US commercial real estate market celebrates its second-best January ever, with $44.6B in transactions, experts worry these record numbers may be masking warning signs.
Real Capital Analytics says January’s numbers, combined with December’s $73B sales, brings the commercial property market to its highest dollar total ever over a 60-day period.
And while numbers are up 12.7% from last year, the volume of total transactions is down 7%, Yahoo reports.
“It is the momentum issue that’s of concern,” says Jim Costello (pictured), VP at Real Capital Analytics.
The type of transaction is also concerning—42% were entity-level sales while individual property sales, the cornerstone of the market, suffered an 18% loss.
Despite this loss of momentum, Costello is confident the US market’s stability will continue to entice foreign investors looking for a safe place to stash their cash. [Yahoo]
