NEW YORK CITY—The numbers help tell the story, but not the whole story. Real Capital Analytics' third-quarter US Capital Trends report reveals a 3% year-over-year volume increase for investment sales across the nation, “a far cry from the double-digit pace of growth set earlier in the year.” September's pace was actually 10% off from the year prior, with all but industrial posting negative yearly trends.

Time to panic over faltering momentum? RCA says no. For one thing, the early part of 2015 was marked by large portfolio transactions that accounted for 38% of Q1's dollar volume, such as the sale of Blackstone's IndCor industrial platform to Global Logistics Properties and GIC. Fewer such mega-deals factored into the Q3 numbers, although there were three portfolio sales worth $1 billion or more, topped by a $5.4-billion, 208-property piece of the sale of GE Capital's real estate assets to Blackstone.

For another thing, September's year-over-year trail-off—which would be only half as large when looking strictly at individual asset sales—bears a strong resemblance to the previous double-digit Y-O-Y decline, in December 2013, according to RCA. That decline, RCA says, followed “months of slowing growth in volume as the market responded to financing changes in the wake of the so-called 'Taper Tantrum,' ” as financial markets worried that the Federal Reserve would begin scaling back its monthly purchases of bonds. RCA sees “similar forces” in the current market, thanks to financial upheaval both here and abroad.

“The sources of financial turmoil are many,” the report states. “What the Fed will or will not do, the devaluation of the Chinese yuan, equity market volatility—all of these have combined to change the investor perception of risk assets.” As a case in point, investor risk aversion pushed the benchmark for the Moody's BAA corporate bond rates up 75 basis points during Q3.

Investors' heightened caution has also spilled over into the commercial real estate debt markets, says RCA. The research firm cites increases of 30 and 40 bps, respectively, for fixed-rate seven- and 10-year mortgages on both commercial and apartment assets. As with the Moody's corporate bond benchmark, these increases came off of lows set earlier in the year.

Given a higher cost of debt for fixed-rate commercial loans, “it may be more challenging for buyers and sellers to see eye-to-eye on asset prices,” according to RCA's report. “Sellers will still want prices tied to recent comparable sales, but some buyers will not be able to get returns to pencil out to the IRRs they were expecting given the higher costs of debt.”

Lenders and borrowers alike have adjusted, though, moving toward short-term loans. In Q1 and Q2, 37% of all commercial loan originations were for terms of less than seven years. The figure climbed to 44% of all loans originated during Q3 as financial turmoil grew, says RCA. The advantage of short-term loans is that, by moving toward variable-rate financing at lower overall costs, “buyers are able to transact deals at returns they need and at prices that sellers are willing to accept,” the report states.

The trade-off, however, is higher refinance risk in the current market. Yet this is offset to a degree by a key difference between the present environment and the conclusion of the “Taper Tantrum” at the end of '13: analysts' expectations for increases in the 10-year Treasury. Then and now, the expectation was for “an eventual increase in rates on the long end of the yield curve. There is, however, an expectation for smaller increases today.”

In the December '13 edition of the Wall Street Journal survey of economists, the 10-year was expected to reach 3.9% in two years. This month's survey calls for only a 3.2% 10-year in 2017. “With such figures, buyers have less expected refinance risk today than they had back in '13,” according to RCA's report.