Global investment in commercial real estate rebounded at the close of 2020, up 84% from the previous quarter and totaling $290 billion, according to new research from CBRE. The activity was a good sign for recovery of the industry and returning demand; however, it wasn’t enough to offset the market dislocation for the year. Global capital was down 26% at the close of 2020.

South Korea, Japan and Germany helped to drive global investment activity. Notably, these countries have also been commended for their ability to handle the coronavirus pandemic with little economic impact. Outbound investment from these countries was on par with 2019 activity. Interestingly, capital flooded into harder hit countries, including the US and the UK, which had strong inbound investment volume at the close of the year. Germany was also on the list for strong investment activity. The announcement of a vaccine also helped to revive investment demand at the end of the year.

Investment activity in the Americas was particularly robust. Global investment in the US increase 97% in the fourth quarter with a total of $135 billion in transactions. While this was a 21% decrease year-over-year from 4Q19, it showed a significant rebound in the US commercial market. The activity accounted for nearly half—47%—of total global investment in the fourth quarter. However, US global investment volumes fell below international trends, down 34% for the year, a notable percentage compared to the 26% drop globally.

Multifamily, with investment volume down only 1% for the year, followed by industrial with investment volumes down only 4% were the top performing asset classes. Office sector investment was down 35% for the year, while retail and hospitality investment was down 5% compared to 2019.

There was also significant interest in the life science sector. In December, Saudi Arabia-based Sidra Capital has acquired a 90% stake in Arborcrest Corporate Campus, a five-building, 855,600-square-foot suburban office campus in Philadelphia, illustrating a rebound in US foreign investment that began in October. At that time, foreign investment inquiries were up 90%, giving many hope that inbound capital was returning to the market. While multifamily and industrial were the top picks among this group of investors—as the CBRE research shows—there was also an increase in interest for life science and data center properties.

This year, CBRE has a positive outlook for most global economies; however, this outlook is dependent on accommodative monetary policies, additional fiscal stimulus and vaccine deployment. Provided these factors are achieved, CRE investment should normalize this year with office workers returning to work and travel resuming, and investment volume will increase by 15% to 20%.