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AREAA Manhattan Webinar: RCA’s Jim Costello Charts What to Expect Next

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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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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