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Alternative Market Briefing

US Property deals value fell by 68% in Q2 2020 from the previous quarter

Monday, July 13, 2020

Laxman Pai, Opalesque Asia:

The aggregate value of private equity real estate (PERE) deals in the US fell by 68% in Q2 2020 from the previous quarter - with every sector recording a decline, said Preqin.

Preqin data shows the magnitude of COVID-19's impact on the US PERE deals market so far. In each of 2018 and 2019, single-asset PERE deals in the country amounted to at least $200bn.

According to the report, at the midpoint of 2020, by comparison, this total stands at only $49bn. Activity in the first quarter of the year was relatively strong - the $37bn in single-asset deals fell just shy of the $44bn recorded in Q1 2019, likely explained by the completion of several longer-term transactions. But in Q2, as strict social distancing measures came into place, the activity took a nosedive, amounting to only $12bn.

"Every sector of real estate investment across the US has been impacted by the COVID-19 pandemic. Domestic and international travel restrictions have created cash flow issues for the hotel sector, and brick-and-mortar retail activity has declined as Americans isolate at home," said the report.

With consumers turning to e-commerce more than ever before, the logistics sector has been put under strain. Meanwhile, the shift to working from home for many businesses has created questions around how office spaces may change in the 'new normal.'

Not only has this rapid change created uncertainty in the market, but the social distancing measures and......................

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