Despite inflation and economic uncertainties, transaction volume and market activity held steady in the first half of the year for CORFAC International’s global members.
A recent survey of the independently owned brokerages comprising the network revealed 31% of respondents said deals have remained the same, 31% said volume has slightly increased and 10% said it has significantly increased.
Another highlight: More than 50% of respondents reported in-bound referrals from existing clients or local allied service providers. This underscores the organization’s strong reputation for service and local market expertise, particularly during times of market volatility. The strength of collaboration between members was also evident, as nearly one-third of respondents reported transaction activity that originated as a referral from a fellow CORFAC member.
“We’re pleased to hear from our members that deal volume is trending positive and that referrals continue to be an important source of new business,” said 2024 President David Boyd, CCIM, SIOR, Principal of Boyd Commercial/CORFAC International in Houston, Texas. “Our network is built on the valuable cross-market connections between members, their clients, and trusted local service providers.”
Industrial Drives Business Activity
The industrial sector continues to generate the greatest share of business activity for respondents, with 62% citing warehouse/distribution as a top driver and 58% citing industrial/manufacturing. Office transactions, investment sales, and retail deals rounded out the subsectors fueling the pipeline for member firms.
One Midwest deal mentioned by a member was the moving of the Door.com (formerly Latch) headquarters to St. Louis into a 48,000+ square foot space.
CORFAC members also shared the bright spots they’re seeing across other markets. The top three factors positively influencing local CRE market activity are population migration to their markets (59%), employers’ return to office requirements (48%), and stabilizing interest rates (48%). The growth of healthcare real estate is another cause for optimism mentioned by multiple respondents.
“We’ve had activity from doctors looking for owner-occupant space as well as expanding medical groups,” explained one member.
Economic Concerns Center on Inflation and Interest Rates
Still-high interest rates and inflation are having the most negative effects on transaction activity and tempering overall business optimism for 83% of survey respondents. Even so, some industry players seem to have adjusted to this environment: “Some investors are stomaching higher interest rates, and some banks are thawing their lending practices.”
Yet, the amount of time deals take to complete is wearying some brokers. “Transactions seem harder to conclude and each project needs more time and effort on our side,” said one respondent. Another added, “Clients are waiting for ‘things to get better’ to make decisions.”
These headwinds reinforce the importance of working with a collaborative and flexible network like CORFAC. With deals taking significant time and effort to conclude and uncertainty around securing financing, deal participants need real estate advisors who can navigate the ins and outs of their local markets and bring buyers and sellers to a satisfying agreement.
