Data from New York City-based real estate research firm Real Capital Analytics reveals that the investment sales climate continues to improve for all property types.
Overall, the firm says sales volume reached $15.4 billion, representing a 50 percent increase from the first quarter of 2009, which marked the bottom of the downturn in sales. Every property type registered higher volume and core sales—rather than distressed—were primarily behind the gains in volume. However, Real Capital did point out an important caveat. Despite the gains, the first quarter posted the fourth lowest volume of sales of any quarter in the past decade.
Moreover, some assets even experienced drops in cap rates as buyers began to get more aggressive and debt has become more available. Average cap rates for retail assets were relatively unchanged for the first quarter, but certain strip centers saw some compression.
Sales of significant retail properties reached $3.1 billion in the first quarter—a 40 percent increase from a year ago. According to the firm, the gain was due to larger deal sizes rather than an increase in activity. In fact, the number of properties sold declined by 7 percent. Regional malls accounted for $1.8 billion of the sales activity with strip centers accounting for the rest.