CHICAGO—Investor interest is still strong across all product sectors, according to the latest survey of CCIM Institute members. More than half of CCIM members who participated in an October/November 2015 market intelligence survey reported participation in more deals year over year. Some 69% of respondents to the 4Q15 Quarterly Market Trends survey reported closing a sales transaction during the prior quarter.

Further, 54% of those polled said their clients showed a greater interest in buying commercial real estate, while just 6% indicated that their clients were looking to sell assets.

With a score of four out of five, CCIM members rates multifamily as having the best conditions for investment. Then came industrial, with a score of 3.7, followed by hospitality, retail and office. Yet when it came to investment value versus price ratio, apartments' score was just 2.8 out of 5—in other words, multifamily is overpriced at this stage in the game.

The value for price is to be found in industrial, which got a score of 3.2 of 5. That would be why the sector saw the highest deal flow of all product types, with deal velocity 79% higher than the same period the prior year. Industrial also saw the biggest decline in cap rates, with about half of all CCIM members seeing lower year-over-year cap rates.

Across the entire commercial real estate spectrum, 47% of CCIM members reported prices rising for properties they sold, while 33% said prices remained the same. The average price for CCIM investment sales deals came in at $3.1 million. The average cap rate for CCIM deals in the nation was 8.2%, with 46% of members saying cap rates were flat in the fourth quarter and 47% reporting lower cap rates for the same period. Nearly half (48%) of those polled said there was a gap in cap rate perception between buyers and sellers.

When it comes to leases, meanwhile, CCIM members reported a 68% closing rate, but it seems they had the best luck in retail, where the closing rate was 100%. Second and third came office and industrial, which had 95% and 83% closing rate. Diving deeper into leasing transactions, rental rates were higher in 65% of leases closed by CCIM members. Looking ahead, over a quarter of those members expect rents to lag behind price growth in the upcoming two to three years. Another 28% said rent growth will outpace price growth, while 47% foresee rents and prices to move at roughly the same pace.

The latest CCIM Quarterly Market Trends Teport, produced by the National Association of Realtors, took place in October and November and tallied information on fourth-quarter 2015 transactional activity. The full report may be accessed here.

Instant Insights /

Deal Pace Rises Toward Year's End

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