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Continued Low-Yield Environment Driving Renewed Investor Creativity
Research by JLL shows the U.S. economy remained fundamentally sound heading into 2018, notwithstanding recent stock market volatility. Though transaction volumes for 2017 reached nearly $400 billion, that represented a 9% softening from 2016, and was largely driven by fewer large deals in gateway markets, according to JLL’s H2 2017 U.S. Investment Outlook.
“The softening of transaction volumes has largely been expected as the redeployment of capital remains a key area of concern for investors underwriting acquisitions at current pricing,” said Jonathan Geanakos, President, JLL Capital Markets, Americas. “The market is showing extraordinary discipline, which is a sign of a rational underwriting environment. This is resulting in more thematic investment and the emergence of creative, less-conventional activities and structures.”
JLL’s research shows industrial was the lone sector to show a year-over-year volume increase, growing 23.3% in 2017 to nearly $60 billion. Volumes were down across the office, retail, multifamily and hotels sectors.
Interest in U.S. commercial real estate from investors domestic and abroad remains strong, and the proportion of off-shore capital holds steady. Global capital spending hit $44.7 billion across sectors, despite a 28.7% drop-off in total cross-border investment year-over-year.
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- ◦Sale/Acquisition
