Commercial Real Estate Capital Trends in Retail: Oct. 2016

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As a commercial real estate (CRE) broker and retail specialist, it is my commitment to my customers to follow the CRE market and have the knowledge of the current conditions. Real Capital Analytics (RCA) is an online big data analytics company, specializing in aggregating big data and generating capital market reports to influence areas of CRE investment markets. RCA has recorded over $16 trillion CRE transactions linked to over 155,000 investor and lender profiles (http://www.rcanalytics.com, 2016). RCA is the industry leader in providing reliable data for the CRE industry with right market valuations, cash flows, and equity investment trends.

©2016 Real Capital Analytics, Inc.

According to RCA, the retail sector year to date (YTD) in 2016 has seen $62.9 billion in transaction volume, showing a slight decrease of 16% YTD’16 in year over year (YOY) volume change. Specifically, October has seen a larger decline falling about 41% YOY on sales of $5.2 billion.

Yes, deal volume has fallen in all retail segments and deal structures are changing. This is not a bad thing however. The declining deal volume in October is not a strong sign of a declining market, more precisely, this change is primarily due to the 33% decline in mega deals in precious October months and a more limited focus on stronger assets in the marketplace.

 

©2016 Real Capital Analytics, Inc.

Average capitalization rate (Cap. Rate) for ALL RETAIL in October ’16 was reported slightly down at 6.4% has seen a decline YOY. Centers considered as a tenant anchored shopping center with multiple tenants. They have fallen YOY since 2015 dropping to 7%. Shops include but not limited to single tenant NNN net lease at 5.8%. This type of volatility is because investors have begun to show much stronger interest because the rate current bonds are trading.

 

 

 

 

For more information please feel to respond to this post or send me an email directly, Brian.Cooper@SVN.com

 

*All data was from ©2016 Real Capital Analytics, Inc.

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