Monthly Archives: September 2016

A Bubble In the Making ?

Colliers International Research Department, led by Pete Culliney, Director of Research in New York, and Andrew Nelson, Chief Economist in San Francisco, have published their Mid-Year 2016 U.S. Capital Flows Research and Market Report for the national capital markets.  One of their many nuggets of information:

  • Repeat sales (of the same property/ies), the best indicator of price movements, are, overall for the four major food groups (CBD office, retail, multifamily, and industrial) up 12% over the prior peak of 2008 in the top six metro markets, admittedly a far cry from our local market. But…
  • The same property types outside the top six metro markets are still, on average, down 16% from the prior peak, but it is a mixed bag, with multi-family and CBD office higher than the prior peak while retail and industrial lag.  See the chart below, thanks to the Colliers International report.  If you would like a copy of it, please email us.Screen Shot 2016-09-13 at 4.12.41 PM.png

Transaction Flow in US Property Markets Down 16% But Pricing Firm

Colliers International’s outstanding research team has analyzed Real Capital Market trends for the first half of 2016 vs prior year’s and found:

  • Investment sale transactions nationwide were down 16% from the first half of 2015, with much of the decline in portfolio purchases.
  • Investment capital remains robust with volume up 15% from the 2014 level, which was the high watermark until last year.
  • Composition of transactions has changed significantly from the first half of 2015 to midway in 2016, with only multi-family (apartment) sales up (+9.7%) and the other major categories all down, led by hotels (-55%), Industrial (-31%), Retail (-20%), and Office (-12%).
  • Despite the slowdown, pricing remains firm, even rising, led by office product (+13.6%), then industrial (+7.6%) then hotels (+4.5%), while apartments (+2.7%)and shopping centers (-0.5%) lagged.  My own editorial – less volume, but higher prices; hmmm, makes one wonder about the quality of the product being traded or external influences such as a bottoming of interest rates…
  • Through 2017, the Colliers mothership expects prices to continue rising and investor interest to remain strong as transaction volumes regain traction as a reflection of the strength and stability of the U.S. economy and remarkably low interest rates, with a warning:  keep an eye on risks and avoid chasing yields as the growth cycle continues.

If you would like a copy of the entire article, please email me at scott.rogers at colliers.com.