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Global Commercial Real Estate Investment Sales Top US$140 Billion in Third Quarter

Apartment sales volumes surge 47 percent from previous quarter

SINGAPORE, CHICAGO, LONDON, 07 November 2013 - With institutions, private equity and high-net-worth individuals all looking to increase their commercial real estate holdings, global transaction volumes topped US$140 billion in the third quarter, marking only the second time in the past six years that volumes have surpassed the US$140 billion mark, according to Jones Lang LaSalle’s Global Capital Flows. The third-quarter total represented a 41 percent increase from the same period in 2012 and a 16 percent jump from second-quarter 2013, with the largest growth taking place in the Americas and Europe.

“Part of the increase in sales stems from investors seeking opportunities in a more diverse range of U.S. locations,” said Stephen Collins, International Director for JLL’s International Capital Markets. “This expansion started with multifamily and office properties and has since broadened into other real estate sectors. The increasing number of transactions in Dallas, Atlanta, Chicago and Seattle shows that purchasers are now keen to look at properties in more than just the core tech and energy cities. Internationally, we’re also seeing more investment activity in the hotel and industrial sectors in secondary and tertiary markets such as Southern and Central Europe.”

Fueling the strong third-quarter showing was the U.S. multifamily investment market, which experienced a strong bounce-back after a relatively subdued second quarter. Apartment sales volumes in the U.S. surged to $25 billion in the third quarter, a 47 percent increase from the preceding three months. Investment sales in the sector continue to benefit from a number of factors, from very strong market fundamentals and capital stack liquidity to the new mantra of the Millennial population looking to rent and not own.

Global investment sales totaled US$366 billion during the first three quarters of the year, a jump of 21 percent from the same period in 2012.

Other highlights include:

  • Eleven of the top 20 most active cities in terms of investment sales so far in 2013 are in North America, where investors, encouraged by a fully functioning and re-balanced debt capital and CMBS market in the U.S., are looking at quality assets in an increasingly diverse number of locations.
  • U.S. private equity has joined capital from the Middle East and Asia in targeting opportunities in Europe. The amount of U.S. capital deployed in Europe during the first three quarters of 2013 was up 50 percent compared to the same period in 2012.
  • After a slight lull in the second quarter, cross-border sales volumes have returned to their long-term average. The 31 percent increase in inter-regional transactions over the first three quarters of 2013 is almost double that for transactions involving parties from within the same region, 16 percent. A large part of this is due to North American private equity and pension funds looking for opportunities outside of their home region, as their search for yield expands beyond the secondary and tertiary markets of the U.S. into Europe.

“With economies across the globe gaining momentum, investors of all types are becoming more aggressive in their pursuit of commercial real estate, and we expect sales to continue to grow,” said David Green-Morgan, Global Capital Markets Research Director for Jones Lang LaSalle (JLL). “In fact, we have increased our full-year forecast, and we now project global transaction volumes to exceed $500 billion in 2013. We also believe that we’ll see volumes grow by another 10 percent next year.”

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Notes to editors:
Property types in the Global Capital Flows report include hotels, office, industrial and retail.

Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2012 alone, Jones Lang LaSalle Capital Markets completed $63 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $60 billion in global investment sales and buy-side transactions, equating to nearly $240 million of investment trades completed every working day around the globe. The firm’s Capital Markets team comprises more than 1,300 specialists, operating all over the globe.
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About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 26, 700 employees operating in 80 offices in 14 countries across the region. The firm was named ‘Best Property Consultancy’ in three Asia Pacific countries at the International Property Awards Asia Pacific 2013, and won nine Asia Pacific awards in the Euromoney Real Estate Awards 2013. 

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