us capital trends the big picture - svn cornerstone · 2000-08-31 · challenges popping up in...

2018

1©2019 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision.

US CAPITAL TRENDS | THE BIG PICTURE

12-mth trailing cap rates

Commercial property sales reached near-record levels of activity in 2018. Volume climbed across all deal types and hit a record high level of activity for single asset sales. Despite these positive stories, there were signs of weakness late in the year.

$562.1b15%

6.2%

In This Issue: We examine pricing and deal activity trends for the fourth quarter and for 2018 overall. We highlight the markets with record activity and rank the top deals and players of the year.

There is something for everybody in 2018. There are positive stories to be seen in annual deal volumes and pricing for those who are optimistic on commercial real estate. For prophets of gloom and doom, there are troubling signs as well. Part of the issue is timing, with challenges popping up in Q4’18.

Taking the broad view for the year, sale activity came in at a near-record high level and would have surpassed the 2015 values with just another $8b in deals. The year was the third largest on record for commercial property sales as capital continues to find opportunities in the U.S. commercial real estate market.

Portfolio and entity-level sales played an important role in the growth of deal volume for 2018 and represented 31% of all investment activity. The entity-level deals represented the strongest component of megadeal growth, both on a percentage basis and in absolute dollars. The $71.2b in entity-level deals completed in 2018 represents the second highest level of such activity historically. Only 2007 saw a higher amount.

Individual property sales did hit a record high level of activity for the year. The $387.5b in single asset sales completed in 2018 was 3% higher than the previous high-water mark set in 2016.

This growth in volume is occurring in the face of record high prices. The RCA CPPI for all property types climbed 6.2% in 2018 from 2017. This index shows that commercial property prices are now almost 30% higher than the levels seen at the peak of the last cycle in 2007.

2018 transaction volume

YOY volume change

YOY price change

Individual Portfolio Entity RCA CPPI $b

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Annual Transaction Volume & Pricing

Year-Over-Year Change

Vol ($b) YOY Vol ($b) YOYOffice 41.3 11% 134.6 1%Retail 17.4 12% 84.5 32%Industrial 27.2 44% 92.4 25%Hotel 14.2 125% 42.0 50%Apartment 50.9 9% 172.6 12%Seniors Housing & Care 3.5 14% 14.1 -14%Dev Site 5.4 -2% 21.8 9%Total 160.0 20% 562.1 15%Major Metros 65.9 35% 214.6 16%Secondary Mkts 70.4 10% 253.4 12%Tertiary Mkts 22.0 9% 89.9 18%Portfolio & Entity 53.7 83% 174.5 41%Single Asset 106.2 2% 387.5 6%

2018Q4 '18

2018 | ©2019 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision. 2

US CAPITAL TRENDS | BIG PICTURE

Trends of 2018

Quarterly Transaction Volume

Year-Over-Year Change

Looking at deal activity into Q4’18, volume was up 20% YOY. To think that there is a sign of weakness in a quarter with growth up so strongly from a year earlier might seem odd, but the concerning sign is the trend from Q3. In any normal year, deal volume in Q4 will come in higher than the Q3 levels due to the seasonal push to get deals closed before year-end. This push typically puts Q4 deal volume up an average 23% higher than Q3 activity over time. In Q4’18, however, deal volume was up less than 1% from Q3’18 levels.

The slower-than-usual deal volume was primarily focused on December. Single asset sales fell 3% YOY in December and portfolio sales were down 19% YOY. Growth for the month overall was positive, though only because $15.3b in entity-level transactions closed in the month.

Industrial and office sales turned in the weakest pace of sales growth for individual assets in December, down 15% YOY and 8% YOY, respectively. Other property sectors did not post the same declines in volume but were weak, showing single-digit growth rates versus the high double-digit growth rates of recent months. There was turmoil in the financial markets in Q4’18 with the potential to impact pricing, which in turn limited deal volume.


The Impact of Opportunity Zones

Billions of dollars of tax-incentivized capital are expected to flow into the 9,000 newly-designated “opportunity zones” in the year ahead. A spike in the sale of development sites within opportunity zones was the first sign of the impact of this legislation. Trends in development site sales both inside and out of opportunity zones moved together up until the end of 2017. Since Q4’17, however, development site sales within opportunity zones have grown at high double-digit rates.

Developing new commercial properties is becoming more expensive. Since it is more expensive to build, fewer projects may pencil out generally. Construction in the coming years is likely to shift more to these opportunity zones. The development site sales are clearly a leading indicator of such a shift. Sales in opportunity zones used to represent 10% of all development site sale activity, but with the double-digit growth rates, such sales were 14% of all activity in 2018.

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YOY Change in Development Site Sales

12-mth trailing volume




Trends of 2018

Cap Rates

Property Prices

YOY change in RCA CPPI

Financial market turmoil was a key theme for Q4’18. In addition to the gyrations of the stock markets, the 10yr UST surged past the 3% level into late September and early October. Commercial property is a yield sensitive investment and any movement in the long end of the yield curve can impact both buyer perceptions of the relative rates of return on offer as well as the costs of financing.

Despite the turmoil in the financial markets, cap rates were unchanged-to-down from a year earlier in Q4’18. Many investors had expected – almost hoped – that cap rates would increase with the interest rate turmoil but there are no signs of such an increase yet. Rather than react to the short-term movements in the 10yr UST, owners took a pause and deal activity faltered.

Deal volume often follows trends in the risk appetite of investors. This appetite can be seen in the spread between the 10yr UST and Moody’s Baa corporate bond index. When this spread widens, investors are becoming risk averse and requiring a premium on corporate debt relative to the safety of the 10yr UST. As shown in the chart below, growth in single asset deal volume often mirrors this spread. This risk aversion measure climbed from Feb’18 to Dec’18 as corporate bond rates moved up more strongly than the 10yr UST. Of concern for 2019, corporate bond rates have not declined in line with the 10yr UST into January, indicating even more risk aversion that could impact deal volume this year.

Will Increased Risk Aversion Spell Trouble for 2019 Deal Activity?

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Risk aversion*

*Basis points spead between 10yr UST and Moody’s Baa corporate bond Source: Real Capital Analytics, Federal Reserve, Moody’s

YOY growth in single asset deal volume

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Sector Momentum

Deal volume and price growth were somewhat correlated within property sectors in 2018 when looking at the breakout between trends in the Non-Major Metros (NMM) versus the 6 Major Metros (6MM). However, there are exceptions.

The apartment sector was the largest commercial real estate investment market in 2018 with deal volume of $172.6b. Annual growth in deal volume in the NMM came in at only 7% versus the 25% growth in sales within the 6MM. The stronger growth within the 6MM came with weaker growth in the RCA CPPI for apartments – up only 4.5% in 2018. Within the NMM, apartment prices were up 10.8% for 2018. The stronger growth within the 6MM is likely a function of deal volume pausing in Manhattan in 2017 and rebounding in 2018.

Likewise, the CBD office sector has this unusual setup where the markets with stronger growth in volume have weaker growth in prices. CBD office activity in the NMM is a thin market – only $11.5b in activity in 2018 versus $51.8b in CBD office activity in general. Within the NMM though, volume fell 9% from the 2017 levels but posted 8.5% growth in prices. Volume was stronger in the 6MM, with CBD office sales up 13% for the year, but the RCA CPPI dropped 4.0% for assets in these locations. Again, the rebound of deal activity in Manhattan from a weak 2017 distorts the trends for the year.

The industrial sector was the third largest investment market in the U.S. for 2018, with deal volume coming in at $92.4b. The portfolio and entity-level activity helped spread capital to a number of smaller markets and the NMM posted the strongest growth rates for deal volume.

Sector Momentum 2018

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6MM Hotel 65%Bubbles sized for 2018 volume

6MM Apartment

NMM Apartment

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NMM Hotel6MM Industrial

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Top Markets

Manhattan retook the #1 spot for deal volume in 2018. This perennial leader had slipped to the #2 slot in 2017 as a pullback by Chinese investors cast a cloud of uncertainty over the market. Not that Chinese buyers were the only source of capital in the market, but their behavior in the preceding years had adjusted pricing expectations for many investors. Cap rates in Manhattan have adjusted up slightly from the lows seen in 2016 and deal volume regained ground in 2018.

Los Angeles slipped back to the #2 slot in 2018 due to the strong rebound in Manhattan. At the same time, while deal volume accelerated in Manhattan, it stalled in Los Angeles with only 2% annual growth.

The Texas markets of Dallas and Houston stand out as interesting markets in the ranking of the top 25 markets

because both markets posted record high levels of deal activity in 2018. These markets each had elevated exposure to the entity-level transactions completed in 2018, with close to 14% of all deal volume in each of these markets tied to such deals.

There was a near-tie for the #3 slot in the rankings for 2018, with deal activity in Dallas a mere $107m higher than that seen in Chicago. Dallas beat out Chicago even though Chicago posted 30% growth in deal volume for the year. Dallas notched a record high level of activity in 2018 even as the market posted only posted a 4% pace of growth. Chicago did not hit a record high for the year despite its strong gain because the EOP transaction in 2007 was heavily concentrated in Chicago and drove deal volume levels that year to a threshold too high to match in 2018.

Most Active Markets 2018

Markets in orange denote record high annual volume in 2018 Office, industrial, retail, apartment, hotel & senior housing; dev sites not included

2013 2017 2018 Market Sales Volume ($m) YOY

1 2 1 Manhattan2 1 2 Los Angeles3 3 3 Dallas5 5 4 Chicago6 4 5 Atlanta4 6 6 Houston8 8 7 Seattle14 11 8 Phoenix7 7 9 Boston11 16 10 NYC Boroughs12 10 11 Denver13 14 12 San Francisco10 13 13 San Jose9 9 14 DC VA burbs17 12 15 No NJ15 17 16 San Diego19 20 17 Inland Empire16 22 18 DC24 21 19 Philadelphia22 15 20 Orange Co18 19 21 Austin20 18 22 Orlando23 25 23 East Bay29 28 24 Tampa28 24 25 Las Vegas

34,234

28,814

22,987

22,880

17,738

16,714

16,069

15,089

14,429

13,891

12,484

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10,320

9,997

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9,316

9,119

7,764

7,632

7,554

7,429

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7,261

6,690

6,506

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Market Momentum

Across markets, there was a bit of a scattershot pattern between volume and price growth for commercial properties in 2018. Scattershot, in that some markets with similar growth in deal volume have significantly different trends in price growth as measured by the RCA CPPI. This said, most markets are in the top right quadrant, which represents a combination of both growing deal volume and growing prices.

The markets outside of that top right quadrant are interesting as exceptions to the general rule. Again, Manhattan retook the #1 spot for deal volume in 2018 and posted a 50% pace of growth for the year.

The 1% decline in the RCA CPPI for Manhattan is precisely why deal volume grew so much for the year.

Owners had held too high of a price expectation for their assets late into 2016 and into 2017 and the market stalled. As these owners became willing to accept some small price changes, deal volume surged.

There is no similar story of the capitulation by sellers at play in other outlier markets such as Boston and DC. Deal volume in DC grew at a 7% pace in 2018 while prices fell 2.5%. In Boston, volume fell 1% while the RCA CPPI dropped 2.1%. As in many of the 6 Major Metros, prices in these markets are at record high levels and there is a bit more of a pushback from investors looking at opportunities in these markets.

Market Momentum 2018

Pric

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Atlanta

Baltimore

Boston Metro

Charlotte

Chicago

Dallas

DC Metro

Denver

Houston

Jacksonville

Inland Empire

Los Angeles Co

Orange Co

Las Vegas

Miami/So Fla

Minneapolis

Nashville

NYC - Boroughs

NYC - Burbs

Manhattan

Orlando

Philly Metro

Phoenix

Portland

Raleigh/Durham

Sacramento

San Diego

Seattle

Oakland/East Bay

San Francisco

San Jose

Tampa

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Bubbles sized for 2018 volume



Market Snapshots

Entity Deals Boost Chicago Volume in 2018 Houston Back on Investor Radars

Deal volume in the Boroughs of New York hit an all-time high in 2018. Exposure to the Brookfield acquisition of Forest Realty helped push activity to this new high level. Despite the record activity, the RCA CPPI for these markets is down 3% from the peak set in Q1’18.

Many investors wrote off Houston into 2016 as fears over oil prices limited their appetite for investment. Transaction volume hit a record high of $17.4b in 2018 because this Texas hub is more than just oil. The RCA CPPI coasted through the 2016 period and accelerated into 2018.

While many markets have seen deal volume fall from the high set in 2015, in Los Angeles activity has been steady at close to $48b per year over the last four years. In line with the volume trends, prices are now at a record high level, with the RCA CPPI growing 6.3% YOY in Q4’18

Deal volume in Chicago closed at $23.6b in 2018, up 29% from the 2017 pace. Still, activity was higher in 2015. This metro area was exposed to every major entity-level transaction that closed in 2018. Despite the growth in volume, price growth was relatively flat in 2018, with the RCA CPPI up only 1.9% YOY in Q4’18.

Los Angeles Bucks Trend Since 2015 NYC Boroughs Prices Slip Despite Volume High

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12-mth trailing vol, all prop types 12-mth trailing vol, all prop types

12-mth trailing vol, all prop types12-mth trailing vol, all prop types



Market Table | All Property TypesTransactions Reported Closed Office Industrial Retail Apartment Hotel Dev Site Senior Hsg & Care Total

2018 Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props Vol ($m) # Props

Mid-AtlanticBaltimore 981.8 57 1,575.7 126 849.6 37 1,457.7 50 267.4 13 80.5 11 113.1 16 5,325.8 310

DC 4,745.5 52 102.6 10 160.3 19 1,212.7 46 1,515.6 19 78.5 8 27.0 1 7,842.2 155

DC MD burbs 1,008.4 48 925.2 68 1,069.8 40 2,906.7 73 225.5 10 50.8 9 307.2 18 6,493.6 266

DC VA burbs 3,454.2 98 677.8 54 1,246.9 58 3,478.7 51 1,009.1 21 1,046.6 46 130.8 11 11,044.1 339

Philadelphia 2,217.4 111 1,131.1 142 777.6 57 2,670.4 94 577.1 18 119.7 16 258.5 30 7,751.7 468

Pittsburgh 346.5 27 124.3 20 269.1 24 400.8 18 205.7 14 29.1 7 71.0 17 1,446.4 127

Richmond/Norfolk 735.1 53 581.6 57 826.3 50 1,246.6 84 405.3 31 51.3 8 100.8 8 3,947.2 291

Tertiary Mid-Atlantic 598.8 80 2,770.7 191 1,016.9 116 1,651.3 100 321.1 49 205.8 29 718.0 68 7,282.7 633

Total 14,131.0 531 7,889.1 668 6,216.6 401 15,114.9 529 4,526.8 175 1,662.3 134 1,726.3 169 51,267.0 2,607

MidwestChicago 6,526.1 180 6,268.9 525 3,555.7 241 5,053.1 206 1,006.7 34 630.7 62 469.0 37 23,510.3 1,285

Cincinnati 384.4 28 888.2 75 477.7 34 578.1 45 156.6 19 88.7 13 253.0 19 2,826.7 233

Cleveland 460.5 19 175.5 26 371.4 34 588.1 38 130.3 18 3.3 1 116.6 21 1,845.7 157

Columbus 382.0 35 1,497.0 81 246.7 34 1,238.3 52 48.1 7 99.7 10 92.8 10 3,604.5 229Detroit 410.7 53 929.0 111 622.4 65 347.0 37 117.4 10 167.6 15 141.2 19 2,735.4 310Indianapolis 587.8 58 1,158.0 91 320.0 47 970.8 57 281.6 21 35.3 6 164.7 10 3,518.2 290

Kansas City 499.6 37 485.1 45 407.0 42 891.0 61 296.9 29 34.7 5 57.4 5 2,671.6 224

Minneapolis 1,872.9 73 1,206.7 154 806.9 72 1,871.8 112 225.4 16 137.1 29 58.6 6 6,179.4 462

St Louis 551.3 51 591.0 79 623.9 60 1,025.9 59 290.4 26 58.6 9 68.9 10 3,209.9 294

Tertiary Midwest 2,133.0 237 2,557.2 350 4,007.7 411 3,913.7 321 1,363.1 188 206.4 49 1,449.0 203 15,630.2 1,759

Total 13,808.2 771 16,074.6 1,560 11,445.3 1,042 16,491.4 989 3,916.7 368 1,462.1 199 2,871.1 340 66,069.4 5,269

NortheastBoston 7,324.6 154 1,923.2 126 1,349.0 111 2,184.3 86 1,602.1 18 278.0 18 45.7 5 14,706.9 518

Hartford 92.0 9 262.2 15 374.4 16 425.1 28 8.0 2 6.9 2 30.5 4 1,199.1 76

Long Island 548.8 49 508.6 85 962.4 50 172.0 13 143.1 9 58.4 9 172.7 5 2,565.9 220

Manhattan 18,926.8 115 43.1 3 4,059.5 153 7,937.5 307 3,048.9 22 1,394.2 29 218.5 2 35,628.4 631

No NJ 1,886.2 131 2,649.6 199 1,925.8 103 2,169.8 212 370.2 21 752.2 56 398.0 19 10,151.8 741

NYC Boroughs 2,930.0 56 2,169.2 138 1,926.0 232 6,422.6 361 268.6 9 1,671.4 95 174.5 5 15,562.2 896

Stamford 505.6 27 41.4 7 364.1 10 453.3 19 69.2 3 10.5 1 1,444.1 67

Westchester 514.6 43 187.3 15 261.4 35 731.7 30 42.4 5 33.4 6 62.7 2 1,833.5 136

Tertiary Northeast 1,163.4 102 1,132.9 119 1,752.5 120 1,745.9 116 556.0 53 121.7 21 283.8 23 6,756.2 554

Total 33,906.7 687 9,134.3 723 12,975.0 830 22,317.0 1,228 6,108.5 142 4,316.2 236 1,396.8 66 90,154.4 3,912

SoutheastAtlanta 3,430.2 152 3,512.6 265 2,027.7 162 7,502.3 242 795.8 58 260.0 43 469.9 24 17,998.5 946

Broward 776.0 61 746.4 75 919.1 67 1,698.2 56 620.8 19 270.9 28 68.9 8 5,100.2 314

Charlotte 1,632.2 58 1,054.3 106 576.2 64 2,766.2 98 196.0 21 118.3 24 162.9 8 6,506.2 379

Jacksonville 507.7 26 764.6 49 233.9 35 1,305.0 66 191.7 18 79.5 16 76.0 6 3,158.5 216

Memphis 135.6 16 1,134.1 73 140.8 21 537.7 41 181.7 15 39.3 7 78.7 6 2,247.8 179

Miami 1,331.9 67 1,675.2 145 1,422.5 101 1,157.1 93 296.8 19 751.3 74 94.4 7 6,729.2 506

Nashville 1,048.3 69 836.5 83 399.8 50 1,843.4 54 412.7 22 218.3 30 197.8 12 4,956.8 320

Orlando 762.8 70 1,132.9 108 840.6 80 3,180.5 80 1,277.9 29 264.6 32 194.9 12 7,654.3 411

Palm Beach 701.1 43 308.9 28 619.4 52 1,420.0 39 412.1 7 217.5 20 319.5 15 3,998.6 204

Raleigh/Durham 2,066.4 97 363.0 38 698.6 48 3,176.2 82 90.2 11 194.3 29 88.3 2 6,676.9 307

Tampa 838.8 75 544.3 68 1,162.0 92 2,943.4 100 825.5 29 159.6 28 376.0 33 6,849.7 425

Tertiary Southeast 2,959.5 319 4,600.8 422 6,726.4 628 11,916.6 780 3,206.1 305 888.7 157 1,531.5 140 31,829.6 2,751

Total 16,235.9 1,055 16,965.7 1,512 15,767.0 1,400 39,446.6 1,731 8,507.3 553 3,462.2 488 3,696.8 282 104,081.6 7,021

SouthwestAustin 1,911.1 61 649.1 85 580.6 69 3,752.7 108 372.7 26 299.7 34 162.4 6 7,728.5 389

Dallas 4,622.5 187 4,548.7 375 3,149.3 221 9,258.7 394 1,045.8 56 804.3 78 361.9 26 23,791.2 1,337

Denver 2,979.9 132 1,609.5 157 1,384.3 122 5,130.8 164 1,060.4 34 497.6 66 319.1 13 12,981.6 688

Houston 2,860.4 133 2,579.9 230 2,949.0 200 7,681.3 280 464.4 42 637.0 76 179.1 9 17,351.1 970

Phoenix 3,283.7 174 2,184.8 193 1,479.1 160 6,410.6 215 1,560.0 49 916.0 91 171.2 10 16,005.4 892

San Antonio 778.0 45 420.1 56 837.8 55 2,505.8 120 730.9 13 75.6 14 72.2 11 5,420.4 314

Tertiary Southwest 1,940.5 223 1,814.7 219 2,802.6 272 6,218.5 457 1,652.4 194 330.0 63 466.6 46 15,225.3 1,474

Total 18,376.2 955 14,146.8 1,357 13,182.7 1,099 40,958.4 1,738 6,886.5 414 3,560.3 422 1,732.6 121 98,843.3 6,106

WestEast Bay 2,587.0 98 1,926.0 168 573.8 62 1,954.0 102 86.6 5 467.3 48 133.2 7 7,727.9 490

Inland Empire 623.3 59 3,912.7 267 1,861.2 100 2,139.3 78 467.0 18 924.4 76 115.2 7 10,043.1 605

Las Vegas 789.4 69 942.1 93 2,028.8 80 2,200.6 82 516.5 9 617.0 50 29.2 4 7,123.5 387

Los Angeles 7,041.8 279 4,441.6 462 6,395.8 320 9,265.3 759 1,543.8 36 753.2 72 126.2 6 29,567.6 1,934

Orange Co 2,786.7 142 1,894.6 202 954.3 83 1,629.9 81 252.1 13 222.5 22 36.4 3 7,776.5 546

Portland 1,385.2 81 830.3 97 778.7 49 2,127.2 123 390.6 11 140.0 25 266.5 13 5,918.5 399

Sacramento 1,138.9 80 797.4 83 817.4 75 1,725.7 109 198.9 15 153.5 21 84.7 5 4,916.5 388

Salt Lake City 373.3 33 599.7 83 471.2 43 1,336.4 55 211.9 15 255.2 25 209.9 10 3,457.5 264

San Diego 2,777.0 110 1,462.6 141 1,957.6 87 2,042.7 135 1,013.5 30 415.4 45 62.3 4 9,731.2 552

San Francisco 4,596.3 75 1,096.9 63 1,028.9 55 2,810.4 210 2,214.1 24 1,001.0 28 53.8 3 12,801.4 458

San Jose 5,112.9 91 2,218.7 114 1,063.8 58 1,565.5 55 327.4 5 509.0 29 32.0 3 10,829.3 355

Seattle 5,593.2 175 2,804.0 194 1,899.3 136 4,810.5 245 636.5 29 943.4 93 325.2 14 17,012.1 886

Tertiary West 2,514.7 243 3,826.6 369 4,885.3 331 4,676.2 307 4,137.5 152 904.7 125 1,167.0 76 22,112.0 1,603

Total 37,319.6 1,535 26,859.4 2,345 24,716.1 1,479 38,283.5 2,341 11,996.5 362 7,306.5 659 2,654.7 158 149,136.4 8,879

Total

Total US 134,560.4 5,570 92,440.2 8,259 84,524.1 6,373 172,611.8 8,556 42,034.6 2,029 21,769.6 2,138 14,122.3 1,143 562,063.0 34,068



Mid-Atlantic Brookfi eld AM

BlackstoneWelltower

Unibail-Rodamco-Westfi eldPebblebrook Hotel Trust

Midwest Brookfi eld AM

PrologisBlackstone

Sterling Bay CosGreystar

Northeast Brookfi eld AMAlphabet Inc

AllianzUnibail-Rodamco-Westfi eld

Rockpoint Group

Southeast Brookfi eld AM

BlackstonePrologisGreystar

Bridge Investment Grp

Southwest Brookfi eld AM

BlackstonePrologisGreystarBREIT

West Brookfi eld AM

Unibail-Rodamco-Westfi eldBlackstone

PrologisPebblebrook Hotel Trust

Ranked by investment volume

SellersBuyers

SellersBuyers

By Number of Properties

By Investment Volume ($b)Top Buyers by Region

Methodology: Rankings are based on the pro-rated share of the total property or portfolio value. In the case of joint ventures, full credit is assigned to each investor. For more information please visit the RCA website.

Brookfield AMBlackstone

PrologisUnibail-Rodamco-Westfield

GreystarBREIT

Pebblebrook Hotel TrustAlphabet Inc

Bank of ChinaHillhouse CapitalHopu Investment

SMG EasternChina Vanke

Office Props Income TrustMapletree Investments

WelltowerBridge Investment Grp

AllianzJP Morgan

Rockpoint GroupInvesco

Goldman SachsTIAA

CBRE Global InvestorsFortress

0.0 20.0 40.0

GGPForest City (REIT)

BlackstoneDCT Industrial

Gramercy Property TrustWestfield Corp

LaSalle Hotel PropsStarwood Capital

EdRGLP (REOC)

Select Income REITCDPQ

JP MorganUBS

GreystarLone Star

HinesJamestown

TIAAExeter

Fairfield ResidentialPGIM Real Estate

CBRE Global InvestorsBrookfield AM

Crow Holdings

0.0 10.0 20.0

China VankeBank of China

Hopu InvestmentSMG Eastern

Hillhouse CapitalBlackstone

Brookfield AMPrologis

WelltowerBREIT

Mapletree InvestmentsAgree Realty Corp

GreystarInvestcorp

Office Props Income Trust

0 500 1,000

GLP (REOC)DCT Industrial

Gramercy Property TrustQCP Inc

BlackstoneGGP

Forest City (REIT)Riveredge Management

ExeterCabot Properties

Lindsay GoldbergGreenfield Partners

Starwood CapitalLone Star

LNR Property Corp

0 500 1,000

Top Buyers and Sellers | 2018



By Region

Mid-AtlanticCBRE

Eastdil SecuredCushman & Wakefi eld

HFFJLL

MidwestCBRE

JLLHFF

Eastdil SecuredMarcus & Millichap

NortheastCushman & Wakefi eld

CBREEastdil Secured

NKF Capital MarketsHFF

SoutheastCBRE

Cushman & Wakefi eldNKF Capital Markets

HFFEastdil Secured

SouthwestCBREHFF

NKF Capital MarketsMarcus & Millichap

Eastdil Secured

WestEastdil Secured

CBRENKF Capital MarketsMarcus & Millichap

Cushman & Wakefi eld

By Sector

Offi ceEastdil Secured

CBRECushman & Wakefi eld

HFFNKF Capital Markets

IndustrialCBRE

Cushman & Wakefi eldEastdil Secured

JLLColliers International

RetailCBRE

Marcus & MillichapHFF


ApartmentCBRE

NKF Capital MarketsMarcus & Millichap

HFFCushman & Wakefi eld

HotelEastdil Secured

JLLCBREHFF

Hodges Ward Elliott

Dev SitesCBRE

Cushman & Wakefi eldNKF Capital MarketsColliers International

JLL

Other

Over $25mCBRE


HFFNKF Capital Markets

Under $25mCBRE

Marcus & MillichapCushman & Wakefi eld

NKF Capital MarketsColliers International

Portfolio SalesCBRE

Eastdil SecuredHFF

Cushman & Wakefi eldJLL

Single Asset SalesCBRE


HFFEastdil Secured

Buyer's RepMarcus & Millichap

CBRECushman & Wakefi eldColliers InternationalNKF Capital Markets

Cross-BorderCBRE


HFFJLL

All ranked by investment volume

By Number of Properties

By Investment Volume ($b)

Methodology: Full credit assigned to each broker when multiple brokers involved. For partial-interest, volume is based on the pro-rated share of the total property or portfolio value. Based on sell-side representation. The transaction volume of brokerage fi rms that have merged are left unconsolidated before the merger date and are attributed to the surviving or newly formed company after the merger date. For more information on rankings please visit the RCA website.

CBRECushman & Wakefield

Eastdil SecuredNKF Capital Markets

HFFMarcus & Millichap

JLLColliers International

BerkadiaMoran & Co

TranswesternWalker & Dunlop

Hodges Ward ElliottKidder Mathews

Avison YoungSVN®

NAI GlobalStan Johnson Co

RosewoodBerkeley Capital Advisors

Lee & AssociatesHunter

Savills StudleyVoit RE Services

HREC

0.0 50.0 100.0

CBREMarcus & Millichap

Cushman & WakefieldNKF Capital Markets

HFFColliers International

Eastdil SecuredJLL

BerkadiaSVN®

TranswesternNAI Global

Kidder MathewsStan Johnson Co

Avison Young

0 2,500 5,000

Top Brokers | 2018



∆ When prices are not known, estimated prices are used in the ranking but are not shown. Volume is adjusted pro-rata for partial interests although $/unit refl ects 100% valuation.* Partial interest ** Forward sale

Property Location Size Type Volume ($m)∆ $/unit Buyer Seller

1 Chelsea Market New York, NY 1,200,000 sq ft OFF 2,397.5 1,998 Alphabet Inc Jamestown

2 666 Fifth (Condo Leasehold) New York, NY 1,426,395 sq ft OFF 1,286.1 902 Brookfi eld AM Kushner Companies

3 Britannia Shoreline Tech Park Mountain View, CA 726,508 sq ft OFF 1,000.0 1,376 Alphabet Inc HCP Inc

4 Spring Creek Towers Brooklyn, NY 5,581 units APT 905.0 162,157 Rockpoint Group JV Brooksville Company Disque Deane Estate JV Trump Org

5 Terminal Stores Building New York, NY 1,054,982 sq ft OFF 880.0 834 Normandy RE Partners JV L&L Holding Waterfront Properties JV GreenOak

6 Exchange Place Boston, MA 1,206,173 sq ft OFF 845.0 701 Allianz JV Beacon Capital Partners UBS

7 Infomart Dallas Dallas, TX 1,600,000 sq ft OFF 800.0 500 Equinix (REIT) DCI Tech Hldgs JV ASB RE Invmts

8 425 Lexington Ave New York, NY 750,000 sq ft OFF 701.0 935 Vanbarton Group JP Morgan

9 Saint Johns Center New York, NY 1,200,000 sq ft OFF 700.0 583 OMERS JV CPP Investment Board Westbrook Partners JV Atlas Cap Grp

10 4 Hudson Square New York, NY 393,488 sq ft OFF 650.0 1,652 Disney Trinity Real Estate JV NBIM

11 5 Bryant Park New York, NY 665,000 sq ft OFF 640.0 962 Savanna Blackstone JV Swig Company

12 1745 Broadway New York, NY 684,515 sq ft OFF 633.0 925 Invesco OBO QSuper SL Green JV CDPQ

13 Santa Monica Business Park Santa Monica, CA 1,200,000 sq ft OFF 627.3 523 Boston Properties JV CPP Investment Board Blackstone

14 JW Marriott San Antonio Hill San Antonio, TX 1,002 units HTL 616.0 614,770 BREIT Miller Global Props JV Principal Financial

15 The Plaza Hotel New York, NY 230 units HTL 600.0 2,608,696 QIA Sahara India Pariwar JV Dream Hotel Grp

16 245 Park Avenue New York, NY 1,723,993 sq ft OFF - * - SL Green HNA Group

17 600 West Chicago Avenue Chicago, IL 1,571,280 sq ft OFF 510.0 325 Sterling Bay Cos JV JP Morgan Equity Commonwealth

18 Parker Towers Queens, NY 1,327 units APT 475.0 357,950 Blackstone Jack Parker Corp

19 121 Seaport (3FL-17FL) Boston, MA 420,000 sq ft OFF 455.0 1,083 American Realty Advisors JV NBIM Skanska AB

20 1700 Broadway New York, NY 626,000 sq ft OFF 453.1 724 Rockpoint Group Ruben Companies

21 Pier 4 Offi ces Boston, MA 373,000 sq ft OFF 450.0 1,206 CommonWealth Partners Tishman Speyer JV China Life

22 10 Hudson Yards New York, NY 1,813,465 sq ft OFF 431.9 * 1,202 STRS Ohio Related Companies JV OMERS

23 Westside Pavilion Los Angeles, CA 600,000 sq ft RET 427.5 * 950 Hudson Pacifi c Props Macerich

24 28 State Street Boston, MA 570,000 sq ft OFF 417.6 733 Heitman Rockefeller Group JV Mitsubishi Estate

25 Archstone 101 West End New York, NY 506 units APT 416.1 822,332 Dermot Co JV PGGM (NL) Equity Residential

The number of buyers or sellers shown on a deal is truncated to two. For full deal and player information go to the RCA website.

Buyer Seller Location # Props Type Volume ($m) ∆

1 Brookfi eld AM GGP Americas 175 DEV, IND, OFF, RET - *

2 Brookfi eld AM Forest City (REIT) Multiple, USA 131 APT, DEV, OFF, RET 11,316.8 *

3 Prologis DCT Industrial North America 395 DEV, IND, OFF 8,439.5

4 Unibail-Rodamco-Westfi eld Westfi eld Corp Worldwide 35 APT, DEV, RET - *

5 Blackstone Gramercy Property Trust Multiple, USA 348 APT, DEV, IND, OFF, RET 7,458.3

6 Greystar EdR Multiple, USA 79 APT, RET - *

7 Pebblebrook Hotel Trust LaSalle Hotel Props Multiple, USA 38 HTL -

8 Hopu Investment JV Bank of China GLP (REOC) Worldwide 720 DEV, IND -

9 Offi ce Props Income Trust Select Income REIT Multiple, USA 85 DEV, IND, OFF -

10 Mapletree Investments Exeter Multiple, USA 105 IND, OFF -

Portfolio Sales

Property Sales

Top Deals | 2018


US Capital Trends® Copyright ©2019 Real Capital Analytics, Inc. All rights reserved. Data believed to be accurate but not guaranteed or warranted; subject to future revision. It is a violation to photocopy or reproduce any part of this publication, or forward it electronically, without first obtaining permission from RCA. For permission, please contact us at [email protected]. To obtain a corporate license for your office, contact us at [email protected].

Jim Costello, Senior Vice President Contact

Robert M. White, Jr., Founder & President

Alexis Maltin, Manager, Analytics

Elizabeth Szep, Manager, Analytics

Haley Crimmins, Analyst

About Real Capital AnalyticsReal Capital Analytics (RCA) is the authority on the deals, the players and the trends that drive the commercial real estate investment markets. Covering all markets globally, RCA delivers timely and reliable data with unique insight into market participants, pricing and capital flows. The most active investors, lenders and advisors depend on RCA’s market intelligence to formulate strategy and to source, underwrite and execute deals. An industry pioneer since 2000, RCA has offices in New York, San Jose, London and Singapore. For more information, visit: rcanalytics.com

About Capital TrendsCapital Trends reports analyze and interpret trends in the global real estate market using RCA’s comprehensive data. US Capital Trends is a monthly edition comprising an overview of the U.S. market and separate reports on the five main property types. Asia Pacific, Europe and Global Capital Trends are published quarterly.

MethodologyData based on properties and portfolios $2.5m and greater unless otherwise stated.

For the most current data and even more options for analysis, visit: rcanalytics.com

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