New York - A new study of the nation's investment trends, published by CCIM and Landauer Associates both of Chicago, reveals that private and institutional investors were the most active commercial real estate market participants in 1995.
The inaugural issue of the CCIM/Landauer Investment Trends Quarterly released last month found that private investors were buyers in 33% of reported transactions, with an aggregate acquisition total of $1.55 billion, and were sellers in 24% of the deals, accounting for $885 million in transaction volume.
Institutional investors, led by insurance companies, REITs and pension funds, were sellers in 16% of reported transactions, worth $2 billion, and purchasers in 11% of the deals, valued at $1.7 billion. These figures result in an average deal size of $12.2 million for institutional investors and $4.6 million for private investors.
The Quarterly also found that the office sector dominated market activity during 1995, accounting for more than half, or $4.8 billion, of the commercial market dollar volume, and for 36% of reported transactions. Insurance companies sold over $1 billion in office assets, twice as much as any other seller group. Private investors led all buyers in the office market by purchasing $767 million in office properties.
Despite acknowledged difficulties in the shopping center sector, retail properties comprised almost 16% of reported transactions, accounting for $1.2 billion of dollar volume. In contrast, the industrial sector reported 143 sales valued at $488 million, while the hospitality market accounted for 80 transactions with a total reported value of $1.6 billion.
As a result, the hospitality market had the highest average price per transaction at $20 million - and industrial properties one of the lowest, at $3.2 million.
Other CClM/Landauer Investment Trends Quarterly findings include:
* The greatest percentage of transactions took place in the most populous regions of North America - (Southeast 25.7%; Pacific Middle Atlantic 13.7%; Great Lakes 9.4%).
* The New England ($13.8. million) and Middle Atlantic ($13.2 million) regions led the nation with the highest average deal prices, while the Southwest ($5.7 million) and Mountain ($6.7 Philippine General Hospital million) states had the lowest.
* Fifty percent of transactions across all real estate types had capitalization rates between 9.8% and 12%.
* Insurance companies were net sellers across all property types, but actively acquired apartments. Pension funds and REITs were also active residential buyers.
* Owners/users were buyers in nearly 205 transactions worth $487 million and sellers in 143 transactions valued at $399 million. These investors focused on smaller deals with moderate per-unit prices and high-end capitalization rates.
* Land sales were strongest in the Southeast, which reported 51 transactions valued at $103 million, and the Pacific region with 22 sales worth $34 million.
* Half of all Canadian transactions in 1995 were industrial sector with a value of $34 million. Canada's total actions were valued at nearly $220 million (Canadian).
Copies of the CCIM/Landauer investment Trends Quarterly North Michigan Avenue, Chicago, Ill. 60611 (312) 321-4494