Baker Tilly’s real estate market report provides a recap of 2020’s second quarter, including market insight, data and analytics on the following sectors: multifamily housing, office, retail, industrial, hospitality and capital markets.
Significant global and domestic issues have caused a halt to the commercial real estate market that was humming along in the first quarter of 2020. Real Capital Analytics reported that sales of commercial property sank again in May to their lowest levels since 2010, with no sector avoiding the decline. The industrial space experienced the smallest decline while retail and hospitality exhibited the most significant decline. Real Capital Analytics also notes that the number of deals in the United States falling out of contract is increasing, reaching 2.9% in May up from 2.1% in April and 0.7% in March. Market participants have reported deals falling apart due to an inability to close financing or buyers giving up earnest money (and in some cases entity policies) to avoid a transaction for which the fundamentals are no longer appealing. Notably, in April Blackstone Group exited a potential $405 million deal, giving up a $20 million deposit in doing so. The same week and in the same city, Kaiser Permanente canceled plans for a $900 million headquarters.