The amount of uncalled or undrawn real estate investment capital, or "dry powder," has grown to staggering levels. This increase has come at a time when the investment climate remains decidedly mixed, with top-quality assets in core markets commanding high valuations after a sustained up-cycle. As a result, investors are increasingly searching elsewhere for properties that offer potentially higher yields.
The effects are showing up in deal volume. The total dollar volume for real estate sales of $100 million or more was 19.5% lower in the first half of 2017 compared to the same period in 2016. However, the deal volume for properties at prices of $100 million or less was just 2.3% lower, according to CoStar COMPs data. Those trends were continuing in the third quarter.
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