CBRE Group, a commercial real estate services firm, has found that investment in U.S. commercial real estate totaled $166.8 billion in the second quarter of 2022, in a newly released Capital Markets Report.
Investment may seem to have dropped dramatically given the explosive buying crunch at the end of 2021 (investments reached $322.3 billion), but the real estate market is not what it was six months ago. in a very different position. Demand for commercial real estate surged last year and debt was cheap (Fed Funds rate hovering at 0.08%). Investment activity in 2022 has slowed due to a number of factors. A sharp rise in inflation, a sharp rise in interest rates, a tightening of commercial loans, and a recession caused by recession. But investment activity isn’t flat, it’s actually growing over the long term. Investment in commercial real estate increased 10% year-on-year, despite higher borrowing costs. Additionally, portfolio trading volume increased 31% year-on-year.
Investors overwhelmingly flocked to the multifamily sector. Second-quarter activity totaled $78 billion, up 32% from the same period last year. Industrial came second with $31.6 billion, and office third with $24.1 billion. Although forecasts vary by asset class, industry-wide forecasts remain good for the second half of the year.