Global property deals decline in 2008

Bloomberg

Office sales dropped 60 percent to $184.1 billion, hotel transactions slid 76 percent to $30.9 billion, and retail deals declined 60 percent to $79.9 billion, New York-based Real Capital said in preliminary 2008 results released Friday. Final figures are scheduled to be released next month.

"With the typical spate of year-end deals, some would have expected the rate of decline in commercial property sales volume to slow in the final quarter of 2008," Real Capital said in the report. Instead, global sales in the fourth quarter fell 80 percent from a year earlier. "The impact of the increasingly sharp pullback from investment is truly global."

Falling rents and rising vacancies across the U.S., the world’s largest economy, resulting from the recession have led commercial-property valuations to decline. Tightening credit has made it more difficult for real estate investors to get mortgages for acquisitions.

Last year marked a retreat from 2007, when global real estate transactions totaled $1.2 trillion. The tally included Blackstone Group’s purchase of Equity Office Properties Trust and land transactions in Asia, according to Real Capital.