As the market enters its sixth year of expansion and volatility heightens in the public equity markets, the chase for yield is intensifying, expanding the supply of inbound capital. The U.S. market is now driving 51.8 percent of global transaction volumes year-to-date. Despite increased caution and continued institutional discipline in markets, leasing dynamics remain strong and rents across sectors are well-positioned for strengthening in 2016. This has paralleled continued momentum in pricing, up 7.7 percent year-to-date across sectors, and select groups are evolving investment tactics to larger, entity-level transactions, notably in the REIT sector. The interest rate environment remains a key factor, but with strong income appreciation and interest rate risk priced into underwriting, the U.S. property market remains well-positioned to absorb controlled, modest rate increases.
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