Mr. Cole Perry reports

ALTUS GROUP RELEASES INAUGURAL U.S. INVESTMENT & TRANSACTIONS QUARTERLY REPORT

Altus Group Ltd. today released its inaugural United States CRE investment and transactions quarterly report, covering national transaction activity for Q3 2024.

Altus Group's transaction data analysis stands out from other industry reports by covering a broader range of transaction activity and slicing the data at a very granular level. This quarterly report offers a comprehensive overview of national commercial sale transactions across major property sectors, focusing on transaction volume, pricing and pacing, with further insights by property subtype and at the metropolitan statistical area (MSA) level. While other reports tend to focus on large transactions, Altus takes a more holistic view of the market capturing single-asset transactions exceeding $100,000 in sale value.

Q3 2024 U.S. investment and transactions quarterly report

The U.S. commercial real estate market recorded $40.1-billion in dollar value transacted in Q3 2024, compared with $43.0-billion in Q2 2024 and $44.4-billion in Q3 2023. On an aggregated national basis, transaction activity in Q3 2024 remained down compared with the prior quarter and over last year across three key metrics as shown in the attached table.

"While transactions continued to decline during the third quarter, the rate of decline has slowed which potentially reflects an improving financing environment and increased optimism," said Cole Perry, associate director of research at Altus Group. "Interestingly, 10 of the 15 property subsectors saw a positive quarter-over-quarter price growth per square foot, led by mixed-use, manufacturing, automotive and office properties. The granularity of our data provides valuable insights, helping CRE professionals stay on top of trends and identify the sectors that will lead the market recovery."

Key Q3 2024 transaction activity highlights:

• During Q3 2024, transaction activity slowed but at a moderating pace. The year-over-year change in number of transactions in Q3 2024 was negative 11 per cent for multifamily (verus negative 33 per cent in Q3 2023 over Q3 2022), negative 6 per cent for industrial (versus 31 per cent), negative 15 per cent for office (versus negative 32 per cent), and negative 9 per cent for retail (versus negative 36 per cent).
• Year-to-date cumulative transaction volume remains low; the number of properties transacted is at its lowest since 2011, transaction dollar volume is at its lowest since 2013 and square footage transacted is at its lowest since 2010.
• The average count, dollar volume, and square footage of transactions on a given day during Q3 2024 sat at or below pandemic-era lows for all property types; however, the average square footage of an individual transaction increased quarter-over-quarter sequentially for all property sectors in Q3 2024.
• The average price per square foot of transacted properties rose by 1.2 per cent quarter over quarter in Q3 2024, with increases across all sectors except hospitality, which fell by 2.6 per cent.
• The multifamily sector posted $12.2-billion in dollar volume transacted in Q3, representing the largest contribution (30.4 per cent) by a single sector. This was followed by industrial with $9.9-billion (24.7 per cent), office with $8.0-billion (20.0 per cent) and retail with $6.1-billion (15.3 per cent).

Note: Property and transaction-level data are sourced from Altus Group's Reonomy product, with data pulled on Oct. 15, 2024, and transactions recorded through Sept. 30, 2024 (the close of Q3 2024). Not all transactions for Q3 2024 were available as of Oct. 15, 2024, so estimates were made to reflect national transaction activity. For information about the data contained in the report and methodology, please see the full report.

About Altus Group Ltd.

Altus Group is a leading provider of asset and fund intelligence for commercial real estate. The company delivers intelligence-as-a-service to its global client base through a connected platform of industry-leading technology, advanced analytics and advisory services. Trusted by the largest CRE leaders, the company's capabilities help commercial real estate investors, developers, proprietors, lenders and advisers manage risks and improve performance returns throughout the asset and fund life cycle. Altus Group is a global company headquartered in Toronto with approximately 2,900 employees across North America, EMEA (Europe, Middle East and Asia) and Asia Pacific.