For the past six months, reading the financial news has probably felt a little like the old gym class game of dodge ball for commercial real estate (CRE) professionals. Negative news articles about the state of the market have been hurtling off the presses every day leaving industry professionals’ psyches battered and bruised.
But scratching beneath the surface, there are some bright spots emerging that may help CRE avoid some of those negative psychological projectiles.
Earlier this week, the Lightbox Monthly CRE Activity Index revealed the fourth consecutive monthly increase in CRE economic velocity.
To follow up on that encouraging update, the Lightbox data team did a query of large CRE purchases over the past 90 days (or so).
A review of the data indicates that more than 60 unique buyers have spent $100 million or more on either a single CRE purchase or a large portfolio purchase. The average purchase price for those acquisitions was $212 million.
If one were to add to the list buyers that spent more than $100 million in assets in total (across multiple properties), the list of unique buyers would be even bigger.
The takeaway is that plenty of “smart money” is using the combination of higher-than-usual distress and lower-than-2022 property values to start acquiring assets. As we discussed on the podcast last week, the deployment of cash has accelerated–especially over the past month–and buyers are realizing that the window of high cap rates and low valuations won’t last forever.
Scanning a sampling of just the “A” buyers on the list, one can see it’s a diverse crowd.
Acacia Capital
AEW Capital Management
Air Communities
Amazon
American Landmark Apartments
Americold Realty Trust
Apple Hospitality REIT, Inc.
Ares Management
Download the full list of “big” buyers and tune in to our CRE Weekly Digest podcast for more commentary on early dealmaking news and emerging opportunities.
