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3Q17 United States Capital Markets Report

3Q17 United States Capital Markets Report

November 2017
Newmark Knight Frank presents the Third Quarter 2017 United States Capital Markets Report. The statistics and in-depth market perspective contained in the report illustrate current trends with a focus on national investment sales.

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Executive Overview

Sales Volume Despite relatively flat overall sales volume in the third quarter, strong market fundamentals are occurring on the west coast as activity is outpacing the east coast for the first time in the current cycle.
Cap Rates While yields remain flat in most large metros, secondary and tertiary cities are increasingly attracting capital and have experienced cap rate compression in those markets.
Rent Growth Western metros such as Phoenix, Sacramento, San Diego and Seattle continue to lead the nation in multihousing rent growth as they benefit from strong demographics and resilient local economies. 
Supply and Demand Despite record high inventory for industrial properties, demand from ecommerce, particularly in the last mile of major metros, continues to drive vacancy rates downward, and pricing higher.
International Capital International investment has moderated in 2017 as investors have faced political headwinds and constrained capital requirements coupled with a lack of available trophy assets and higher cap rates.
Debt Markets CMBS issuance through the first three quarters of the year totaled $66.6 billion, representing a 34.3% increase versus the first three quarters of 2016. REITs continue to grow their lending business as the most recent data shows a 5.2% quarter-over-quarter increase.

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