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​Elevated new supply, rising interest rates, and the continued low-yield environment are weighing on investors. Yet an uptick in opportunities drove U.S. real estate transaction volumes to exceed expectations in the first half of 2018, increasing by 3.4 percent, to reach $194.9 billion.

Commercial real estate demand fundamentals are healthy and the U.S. economic outlook continues to be favorable. The following themes are expected to shape investor behavior in the months ahead:

  • Pockets of the market are seeing exceptional manifestations of liquidity with investors in pursuit of scale and market share.
  • Driven by domestic buyers, the share of transaction volumes in primary markets ticked up in the first half of 2018, following three consecutive years of declines. 
  • Investors' definition of core assets continues to narrow, with a heightened focus on best-in-class assets. This is impacting liquidity and pricing for core transactions. 
  • The office sector in particular is seeing a resurgence of large, single assets coming to market, which is expected to drive volumes in the second half of the year across the majority of primary markets.
  • The financing markets for U.S. commercial real estate remain competitive, with banks, life companies, debt funds and CMBS lenders active. Lenders are underwriting increasingly aggressively on the most sought-after opportunities. 
  • The U.S. remains a leading recipient of cross-border capital with the share of non-domestic investment holding steady on last year.
  • Canadian and European investors are driving the bulk of cross-border acquisitions at a time when interest rates and currency fluctuations are resulting in higher hedging costs for select Asian outbound investors.

Key themes


U.S. real estate transaction volume in H1 2018 marks 3.4 percent increase to reach $194.4 billion.

Global capital

The composition of cross-border capital is evolving but overall participation holds steady.


Lending markets are increasingly competitive on the most sought-after opportunities.

Multifamily investment

Transaction activity remains high despite heightened deliveries and robust supply pipeline.

Explore the cap rate map Get the Multifamily Investment Outlook

Office investment

Investors’ definition of core assets continues to narrow, with heightened focus on best-in-class assets.

Explore the cap rate map Get the Office Investment Outlook

Industrial investment

First half of 2018 tallies second strongest start in sector history, positioning for a record-setting year.

Explore the cap rate map Get the Industrial Investment Outlook

Retail investment

Underpinned by entity-level trades, retail transaction volumes mark lesser decline in first-half 2018 than in recent periods.

Explore the cap rate map Get the Retail Investment Outlook

Lodging investment

Hotel sector posts highest year-over-year growth in liquidity of all property types.

Explore the cap rate map Get the Lodging Investment Outlook

Net Lease investment

Net lease transaction volumes in line with broader sector activity; transaction volumes total $23.7 billion in first half.

View market snapshot Get the Net Lease Investment Outlook

Download the report

View the complete H1 2018 U.S. Investment Outlook for more on the latest trends for each property sector.