CRE Deal Volume Up 7.5% in 2018

Commercial real estate sales volume totaled $537 billion last year, the second strongest year on record in the US, according to research from Ten-X. The 2018 deal velocity was up 7.5% over 2017. While the acquisition and investment activity is certainly a reflection of strong market fundamentals, the deal volume was driven by a significant increase in merger and acquisitions and the new opportunity zone tax legislation.

“There was a lot of merger and acquisition activity, particularly in the retail space. One of the larger and more notable transactions was Brookfield’s acquisition of GGP for $15 billion. That really boosted deal volumes in the retail sector,” Christopher Muoio, quantitative strategist at Ten-X, tells GlobeSt.com.

Opportunity zones were an equally strong driver of activity. Muoio estimates that 14% of deal volume in 2018 occurred in designated opportunity zones. “The opportunity zone legislation created in the recent tax overhaul,” he says. “A lot of the investors and clients that we talk to are really interested in this space, and it seems to be a rising theme. Investors are trying to take advantage of this tax legislation.”