2022 Halftime Report
With half of 2022 now behind us, analysts are reporting increases in Q2 commercial real estate deal volume and overall prices, despite inflation and rising lending rates.
Year over year, deals were up 17 percent on average. However, deals under $20 million were actually down 11 percent. The apartment and industrial sectors logged the strongest transaction volume with 62 percent of all deals. Yet, again, deals under $20 million in these two sectors were down 22 percent. The upshot is that the larger, institutional investors continued to place money out of necessity.
As for prices, analysts found an overall jump of 18.5 percent over the same quarter in 2021 with apartment prices up nearly 24 percent and industrial prices up 27 percent.
Astute analysts are offering warnings regarding “negative leverage”—that is where lending rates surpass CAP rates of return and properties dip into negative yield…not a good thing