Commercial Real Estate News Wrap Up From Liberty SBF

While banks have become more selective about sponsors, nontraditional lenders have stepped up to fill the void left by conservative banks. In a recent event, panelists spoke about the impact foreign investors have had on the NYC commercial real estate market. In fact, Kuafa Properties EVP Jeff Dvoerett stated that his firm’s, “only disappointment this year [was] that it hasn’t had more transactions and investment opportunities.” Although these foreign investors may face hurdles, such as the upcoming election and the 421-a tax exemption, developers local to NYC aren’t worried about a sudden stop to the influx of capital coming from overseas.

In a recent report, Ten-X Research outlined several commercial real estate trends the market has seen in the first half of the year. Research shows falling cap rates within four of the five CRE segments, with office being the only sector that saw a modest increase. Commercial risk premiums increased in three sectors from Q1 to Q2, although it declined within the industrial and hotel segments. Finally, transaction volume across all five asset classes declined in Q2, continuing a downward trajectory. Still, despite the cooling of CRE markets, transaction volume totaled more than $100B, perhaps a sign of the continued confidence in US real estate despite global volatility.