Real Capital Analytics saysuncertainty from investors continues to climb and US commercial property sales fell again lastmonth with the coronaviruspandemic.

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"The headline figures for dealactivity in May are dismal," RCA wrote in a report."Investor uncertainty continues to mount as it remains unclear theextent to which Covid-19 will impact the broader economy and sapbusiness demand for commercial property."

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The report says many investorsare making the choice to sit on the sidelines. The new report comesas the US  remains in the throes of a coronaviruspandemic, which has forced many businesses to rethink how they willprevent the spread of the deadly virus.

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Last month, overall volume camein at $9.8 billion, according to the company, and transactionvolume dropped to the lowest level for a May month since2010.

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"Construction starts have droppedoff at a similar pace to that of volume. Through May, the pace ofacquisitions has fallen 21%," according to the report. "PreliminaryRCA data shows construction starts for all properties are expectedto be off by around 30% for the first half of the year."

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The report says credit markets"are far from frozen." Refinancing activity for property types isabout 30% behind when compared to the same time period one yearago, according to preliminary RCA data tied to May andApril. 

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"It should be noted that 2019 wasa high-water mark for refinancing volume," the report says. "If thelevel of April and May volume is compared to the average level forthe years 2015 to 2018, current levels would be off by less than20%."

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The report says hotel propertiessaw a 95% drop in year-over-year transaction volume during May2020. 

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Retail properties had a 83%decrease in year-over-year transaction volume during May 2020,while office property had a 82% drop and apartment property saw a81% decrease in that metric, according to the report.

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Reports of "potentiallydistressed assets" have been going up since the beginning of 2020,according to RCA.

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"Lenders have been willing togrant borrowers forbearance, so instances of defaults orforeclosure proceedings remain small at this early juncture,"according to the report.

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Ryan Tarinelli

Ryan Tarinelli is a reporter at the New York Law Journal. He is based at the New York State Capitol in Albany, New York. He can be reached through email at [email protected]. Follow him on Twitter: @ryantarinelli.