Real Estate Investment Sales Surge 22.7% in Q3, Powered by Private Deals

The real estate investment market witnessed a significant uptick in Q3 2024, with sales rising by 22.7% compared to the previous quarter. This surge was largely driven by an increase in private deals, which accounted for a substantial portion of the overall transaction volume. This article delves into the factors behind this growth, the role of private deals, and the sectors that saw the most activity.


Interest rates and capital availability played a pivotal role in the increase in real estate investment sales. As the Federal Reserve began easing monetary policy, participants in the Q3 2024 survey anticipated a decline in all-in interest rates and the cost of capital for commercial real estate (CRE). This, coupled with an expected improvement in capital availability from both equity and debt sources, created a more favorable financing environment. Consequently, property-level revenue and net operating income (NOI) growth were expected to remain stable, supporting property valuations.


Private deals took center stage in the 22.7% rise in real estate investment sales. These transactions, which are typically less transparent and more flexible in terms of pricing and terms, offered investors unique opportunities. Private deals predominantly focused on sectors such as multifamily, industrial, and office properties, where cap rates remained high and potential for value-add strategies was significant. The shift in property pricing perceptions, with many respondents characterizing current pricing as "fairly priced," also influenced investment decisions and contributed to the rise in sales volume.


The increase in transaction intentions across all firm sizes further bolstered the rise in real estate investment sales. A significant majority of respondents (89%) planned to transact in the next six months, with larger institutions (over $5 billion) intending to buy and/or sell, and smaller institutions (under $500 million) planning to be net buyers. This momentum, coupled with the improved financing environment and favorable capital availability, led to a surge in investment activity.

As the real estate investment market continues to evolve, investors should stay attuned to the shifting dynamics and opportunities presented by private deals. The increased activity in this realm, while offering attractive returns, may also impact liquidity and transparency in the overall market. By understanding these trends and maintaining a strategic focus, investors can capitalize on the growth and potential of the real estate investment sector.