Private buyers have increased office acquisitions in US markets over the first half of 2012, according to Real Capital Analytics, but institutional investors still make up the majority.
In its US Capital Trends – Office Buyer Composition report for H1 2012, Real Capital Analytics says institutional investor demand for office properties ‘remains strong’, and the sector accounted for a third of volume over the period.
Private buyers’ share of office acquisitions increased to 29 percent over the period, up from 20 percent in 2011.
It says acquisitions by listed REITs and foreign buyers are “off sharply so far this year”.
According to RCA, improved financing conditions are resulting in a rebound of private sector investment. Private buyers are averaging more than 7.5 percent initial yields on their office acquisitions.
The average yield on institutional office acquisitions of 6.5 percent, 1 percent below the other sectors, reflects the core CBD locations and strong tenancies.
Institutional office acquisitions this year is up in Manhattan, Boston, San Francisco, Chicago, Seattle and Denver, RCA says.