GLOBAL - US commercial real estate transactions slowed in January from to $10bn (€7.2bn) from $29bn in December 2010.

A research note from Real Capital Analytics attributed the figure to a year-end sales spike exaggerating the seasonal January decline and a December rush to sell off distress assets.
According to the research firm, year-on-year comparisons offered a "more sanguine assessment" of the market, with 50% higher sales volumes in January 2011 than in the same month the previous year.

Despite volume declines for industrial properties and land, and flat residential sales, the note said activity remained strong and that the underlying trend of improving market conditions remained in place.

Office, retail and hotel sales volumes all held up.

Especially in office, there has been an improvement in pricing for prime assets in major markets including New York, Washington DC, San Francisco, Los Angeles, Chicago and Boston.

Prices across these cities increased by 7% between November and December - 32% higher than the December 2009 lows.

Although distressed assets are still selling well below performing ones, outstanding distress in January stood at $178.9bn, down $6.7bn from its peak in September. 

RCA said resolutions continued to rise as a share of all workout activity, with lenders "increasingly amenable to liquidating loans instead of modifying or restructuring existing debt as investment conditions improve and pricing firms".

Across sub-sectors, REITs and equity funds took the largest share of portfolio deals - a reflection, the researchers believe, of their ability to procure low-cost capital to finance large transactions.

Private buyers were active in acquiring one-off assets and in tertiary markets.
In contrast, REITs were most active in niche sectors, including student and senior housing, medical offices and data centres.

RCA said: "Niches notwithstanding, the increasing power of equity funds, institutions and other investors that became evident late in 2010 should put the listed REITs on notice that they are no longer the only group with capital in hand."