Private equity real estate activity stalled the first three months of the year, with global funds slowing their transactions in Q1 compared to last year's strong fundraising efforts and deal flow.
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CoStar Group COMPs data shows commercial real estate-focused equity funds invested in 136 properties totaling $6.1B last quarter, a far cry from the $15B worth of investments made in the year-ago quarter.
On the buyer side, private equity investors favored office assets, making 26 purchases for $2.16B in the past quarter. Multifamily assets followed, with investors grabbing $1.6B worth of apartment properties, CoStar reports. Activity on the net sales side remained strong compared to last year, with private equity funds completing 171 dispositions for roughly $7.9B.
Private equity real estate funds raised $16B globally in Q1, according to Prequin, down from the $32B raised in Q4 2016. As for dry powder, the cash reserves set aside for investment purposes, those numbers were up to $245B by the end of Q1. At the end of last year, real estate funds had $237B available in dry powder on the books, a leap from the $229B that was on reserve in 2015.
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