National transaction activity in commercial real estate activity has dropped by 10% of deal count between the second and third quarters of 2024, according to an Altus Group report. The plunge in dollar volume was 6.6%, and 3.8% by square footage.
A year-over-year analysis showed a 9.9% drop by count, a 9.6% fall by dollar volume, and an 11.4% square foot decrease.
The analysis, according to Altus, was of data on single-property, non-distressed commercial property sale transactions across major sectors including multifamily, industrial, office, retail, hospitality, and commercial general and mixed-use.
The report said that transactions through the end of the third quarter “remained low.” This was the lowest transaction count of nine-month activity since 2011, the lowest cumulative dollar amount since 2013, and the lowest cumulative square footage since 2010. These are years following the Great Recession and the enormous real estate collapse that happened then.
The all-sector average price per square foot did rise by 1.2% between the second and third quarters. Year-over-year, it fell by 1.6%.
Almost all categories fell in transaction numbers between Q2 and Q3. Commercial general was down 5.5%; industrial dropped by 10%; multifamily dropped 12.3%; office fell 11.5%; retail slid by 10.7%; and hospitality, the only exception, was up 9.2%.
Year-over-year, every sector was down. Commercial general dropped by 12.2%; hospitality fell 6.5%; industrial, 5.6%; multifamily was down 11.4%; office by 15.4%; and retail lost 8.7%.
Dollar values between the second and third quarters fell 1.7% for commercial general; 33.3% for hospitality; 11.1% down for industrial; 5.4% off in multifamily; and retail, 12.3%. Office, unexpectedly, saw the only increase of 15.5%.
Year-over-year changes were all down except office again, which grew 20.8%. Then commercial general was down 10.8%; hospitality by 18.4%; industrial by 10.2%; multifamily, by 21.3%; and retail, by 8.7%.
In square feet, between Q2 and Q3, two areas were up: commercial general at 0.1% and hospitality, 27.6%. The ones that fell were: industrial, 6.8%; multifamily, 8.5%; office, 4.2%; and retail, 1.6%.
The year-over-year square footage change also has two gains: hospitality at 0.9% and office, at 4.4%. Then the types that fell were commercial general, 12.9%; industrial, 15.9%; multifamily, 18.1%; and retail, 10.2%
What makes this report interesting is to compare it with expectations of the direction CRE markets are going. Multiple parties have forecast that markets are near the bottom and predicting that now is the time to invest. But the measurable progress, or regression, suggests that a nadir could still be a way off.