Global property consultant CBRE is reporting that Q1 2021 commercial investment volume in the U.S. fell by 27.6% year-over-year to $92.4 billion but was on par with average Q1 volume from 2011 to 2020. Excluding entity-level and large portfolio transactions, Q1 investment volume fell by 20.4% year-over-year.
Price discounts and one large-ticket transaction drove growth in the hotel sector. Multifamily and industrial also showed resilience in single-asset investment over the past 12 months.
CBRE says private investors remained active, while REITs/public companies registered the largest year-over-year decline in transaction volume (-75.0%).
Foreign investors targeted office and multifamily assets in Sun Belt markets like Atlanta, Dallas and Phoenix.
Multifamily and industrial cap rates continued to compress in Q1, while CBD office cap rates also fell due to reemerging demand. Retail and hotel cap rates increased slightly.
While the annualized total return of 2.6% in Q1 was half of what it was a year ago, it gained a full percentage point from Q4 2020, mainly as asset appreciation started to recover. Across all sectors, industrial saw the largest appreciation at 9.3%, while hotels registered the greatest depreciation at -20.7%, concludes CBRE.