Commercial real estate registered another strong year of sales transactions in 2015, nearly matching the record pace of transactions in 2007. However, in contrast to the last cycle, when office buildings dominated, the market is more balanced now, with multifamily edging out office as the top sector, while industrial and office both grew. Hotels also lost share. Foreign buyers account for a growing share of transactions, particularly for trophy assets in the top markets, though domestic sources still account for the vast majority.

Despite a slowdown mid-year, 2015 ended very strongly with the best fourth-quarter gains since 2012, and that momentum has carried forward into this year. Though pricing growth seems to be easing as prices in more markets now sit well above prior peaks, transaction volumes still remain robust, though there have been signs of easing in early 2016. We anticipate 2016 will prove to be yet another strong year, though likely with more modest price and transaction volumes than we’ve seen in recent years in light of the global economic slowdown and lofty price levels.