The U.S. property market is no longer on top.
For the first time since 2017, Europe saw more commercial real estate deals than the U.S.
America saw $19 billion less in property trades above $10 million than Europe during the second quarter, Bloomberg reported, citing data from Real Capital Analytics.
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Though Europe has a larger population, the U.S. has seen a greater number of Covid-19 infections and deaths. The public health situation creates “greater uncertainty around underwriting future income trends for a property” for investors, Jim Costello, senior vice president at RCA, said in the report.
“The social safety nets of European countries can look more expensive, but in a time of crisis, they can also help investors understand how economic losses will be distributed,” he said.
The U.S. property market has largely outperformed Europe since the 2008 downturn. In the fourth quarter of 2017, however, Blackstone’s sale of a European warehouse company for $13.8 billion gave the continent a bump.
Other reports have also indicated that the U.S. has seen the greatest drop in deal volume as a result of the pandemic. The Americas region saw deal volume fall 70 percent to $43 billion in the second quarter of 2020, according to CBRE, the biggest drop of any market. Deal volume in the Europe, Middle East and Africa market fell 38 percent. [Bloomberg] — Sasha Jones