New analysis from the CoStar Commercial Repeat Sales Index (CCRSI) released this month shows that prices in the commercial real estate market have recovered more rapidly than transaction activity, suggesting that investors are focusing on the most attractive deals. According to the data, investment transaction activity has progressed much like the overall economy, showing steady but painfully slow improvement. The data suggests that uneven liquidity remains an important force to be reckoned with among the myriad adverse factors weighing on CRE value recovery, especially for non-institutional-grade properties or assets in non-prime markets.
"For some time now, there’s been a significant imbalance between the amount of capital chasing real estate deals and the available supply of reasonable, institutional-quality deals," said Michael Zietsman, managing director and regional head of the Southwestern Capital Markets Group for Jones Lang LaSalle. "If there were more supply, there would be much larger transaction volume. The primary markets and product types have fully recovered, but investors want high-quality real estate. That’s been our biggest challenge."
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