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Thursday, 09 July 2015

Small-Cap Property Sales on Record-Setting Pace; Prices Also Improve

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Commercial Real Estate Direct Staff Report

Sales activity for small-capitalization commercial properties so far this year is running well ahead of last year's record levels, according to Boxwood Means LLC.

The Stamford, Conn., research company counted $27.5 billion of sales through April, up 14.4 percent from a year earlier. It attributed much of the gains to optimism among small businesses, noting that they're generally borrowing more. And, evidently, some of the capital they're borrowing is going toward property acquisitions.

Many small-cap properties, those valued at $5 million or less, are occupied by their owners.

A total of 103 of the 122 markets tracked by Boxwood Means saw increases in sales volume this year through April. The company projected that small-cap property sales will continue on a record pace, given expectations for continued economic growth, relatively low vacancies and improving rental rates.

Meanwhile, prices for small properties are up 2.1 percent, to a level last seen six years ago.

Boxwood Means noted that its Small-Cap Property Index-117, or SCPI-117, which tracks small-property values across 117 metropolitan areas, has recovered 50.8 percent of the losses incurred following the financial crisis. The index remains 11 percent below its pre-crisis peak.

That's in contrast to larger-cap properties that are tracked by the Moody's/RCA Commercial Property Price Indices, or CPPI, which is 11.5 percent higher than it was pre-crisis. While that index tracks the sale of properties as small as $2.5 million, it's heavily swayed by very large properties in major markets, which have exploded in value. Office property prices in major-market central business districts, for instance, are up 41.9 percent from their previous peaks.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.


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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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