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Peter Muoio Peter Muoio is the chief economist for Ten-X.

Office deal volume nationally has increased only slowly since 2015, thanks to weak fundamentals that are now beginning to deteriorate. Generally, the asset class has seen high vacancy rates and new trends, like telecommuting and file storage, in the office space that has led companies to shed office space. While deal volumes have increased slowly, they are beginning to speed up. Office deal volume has been consistent since 2017, but bumped up 17.5% in the third quarter over the second quarter 2018 and is up 15% year over-year to $34.3 billion, according to Ten-X Research. However, while the quarter was strong, overall office volume trends are slow.

“Year-to-date in 2018, office volume, $92.6 billion, is 3.6% lower than in the same period 2017, $96 billion, illustrating this flat trend in volume,” Peter Muoio, Ph.D., EVP of Ten-X and a speaker at the recent Trigild Lender Conference in San Diego, tells GlobeSt.com. “We also think a slowdown in deal volume could be in store for 2019. Interest rates are on the rise and cap rate spreads are tight, and we expect cap rates to drift higher in 2019 in accordance with those pressures. This would put downward pressure on valuations, which may make sellers reluctant to complete deals.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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