Second-quarter commercial real estate sales transaction volume was down about 50% from the comparable period last year, but flat sequentially, Green Street reported. Year-to-date transaction volumes are now in-line with longer-term averages, although well below last year’s pace.

“Broader macro conditions are not supportive of CRE transactions right now,” said Daniel Ismail, co-head of strategic research at Green Street. “Credit availability has tightened, and that combined with higher interest costs, a persistently wide bid-ask spread, and the lack of forced sellers is limiting deal flow.”

He continued, “The decline remains fairly broad-based, as no markets appear to have avoided material slowdown in transaction activity. The office sector has shown the most pronounced drops – particularly in markets like Houston, New York and Atlanta – relative to estimated market value, while apartments and strip centers stand out with steep year-over-year volume declines. Despite cyclical headwinds, REIT M&A has picked up in Q3 and major deals in office and industrial provide North Stars for values and some glimmers of hope.”