To understand what may be in store for U.S. commercial property markets during and after the COVID-19 pandemic, it’s helpful to look at property sales in Asia Pacific during the first quarter, Real Capital Analytics’ Jim Costello said Thursday. In that region, which had to contend with the pandemic earlier than the U.S. did, there was a 52% year-over-year decline in sales volume for Q1.

In the U.S., “the first quarter wasn’t all about COVID-19,” said Costello, who presented a summary of RCA’s just-released Q1 capital markets report during a webinar sponsored by AREAA Manhattan. “January and February weren’t bad.”

The downward trends, he said, showed up domestically toward the end of Q1. March’s totals represented the lowest for that month since 2014. Senior housing/care properties and hotels posted the biggest Y-O-Y drops, although all property sectors suffered.

Looking at what to expect next, Costello noted that while distress could bubble up into the market over the next 18 to 24 months, a repeat of 2008 wasn’t likely. For one thing, in contrast to the Great Financial Crisis, where the then-dominant financing vehicle of CMBS came to a virtual standstill, there’s plenty of liquidity in the market now. That means the steep drops in pricing experienced 10 or 12 years ago aren’t likely to occur this time.

The hour-long webinar, for which replays will be available, also brought two investors into the conversation. Kingbird Properties’ Ken Munkacy and W. P. Carey’s Tyler Swann provided insights into the investment opportunities they’re anticipating in the current investment. MGO’s Christina Chao moderated the discussion.

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