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​Despite the length of this expansionary cycle, the U.S. economic outlook continues to be favorable. With the recent passing of the Tax Cuts and Jobs Act, GDP growth in 2018 is expected to exceed last year’s increases. This is sustaining strong fundamentals, notwithstanding that supply-side pressures remain elevated.

​National commercial real estate transaction volumes exceeded expectations in the first quarter of 2018, marking a 4.7 percent increase – boosted by industrial portfolios, multifamily trades, hotel acquisitions and off-market transactions.

That said, for full-year 2018, we expect overall volumes to decline in favor of debt and M&A. Several themes are prevalent for the beginning of 2018, and will continue to define the year:​

  • Core liquidity remains soft, but is expected to improve modestly for gateway markets and best-in-market product
  • Stable, elevated pricing and the appetite for yield continue to influence fundraising behaviors
  • The allocation and deployment of capital remain key areas of concern for investors underwriting acquisitions at current pricing
  • Asian buyers will remain pronounced this year and continue to increase interest in high-quality assets outside of gateway markets

Key themes

Transactions

Core liquidity remains soft, but is expected to improve modestly for gateway markets and best-in-class product.

Global capital

Aside from investors from Canada, non-domestic buyers have been relatively quiet, but Asian buyers will remain pronounced this year.

Fundraising

The market has seen a resurgence in opportunistic funds closed in the first quarter, already at 80.0 percent of full-year 2017 levels.

Debt

With limited capital appreciation expected in the near-term, investors will remain focused on defensive strategies in the U.S. to protect income​.

Multifamily investment

Transaction activity picks up in Q1 and marks an uptick in primary markets despite supply-side risks.

Explore the cap rate map Get the Multifamily Quick Look

Office investment

Office investment remains selective, with off-market deals boosting activity.

Explore the cap rate map Get the Office Quick Look

Industrial investment

Industrial sector marks continued, significant growth in investment activity in Q1 2018.

Explore the cap rate map Get the Industrial Quick Look

Retail investment

Though transaction momentum continued to slow in 2018, retail investors begin to rebuild confidence.

Explore the cap rate map Get the Retail Quick Look

Lodging investment

Exceptional transactions activity in first quarter of 2018 underpinned by acceleration in performance growth.

Explore the cap rate map Get the Lodging Quick Look

Net Lease investment

Net lease transaction volumes in line with broader sector activity; volumes slow by 5.0 percent in first quarter.

View market snapshot Get the Net Lease Quick Look

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View the complete Q1 2018 U.S. Investment Outlook for more on the latest trends for each property sector.