The sale of office towers, apartment buildings, hotels and shopping centers is on the decline throughout the U.S.
This pivot in commercial real estate transaction volume has been on the decline since deal volume peaked in 2015 at $262B nationally, Bloomberg reports. The market has since witnessed a drop in part due to high pricing and overbuilding in core markets.
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In New York City, transactions for offices, apartments and other commercial buildings dropped by 50% last year, Real Capital Analytics reports, thanks to lower-yielding bonds and a growing discrepancy between the perceived value of properties and the price buyers are willing to pay.
Investors are eyeing opportunities elsewhere and some major players have shifted from conducting equity deals to creating debt funds to provide real estate loans to their peers.
The debt market has become so attractive that landlords are looking at both mortgage options and possible buyers at the same time, Bloomberg reports. And because the lending landscape has become so competitive, negotiating favorable terms has become easier than ever for borrowers.
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