Commercial real estate pricing entered 2018 on a low note. Nationwide prices fell 0.3% last month, representing the ninth consecutive month of declines. “We edged off historic highs. The declines over the last three quarters have been mild and more of a stagnation than a decline,” Ten-X Senior Quantitative Strategist Chris Muoio said. “Prices have plateaued.”
As prices continue to fall, the industry’s aggressive fundraising efforts have left an abundance of dry powder — cash reserves set aside for investment purposes — in the market. Billions in capital that is not deployed, coupled with a lack of attractive investment opportunities, has contributed to the slight drop in commercial real estate valuations.