During the fourth quarter of 2016, all eyes were on the United States. New President Donald Trump was the first U.S. President to be elected without having held a prior official public or military position.
Despite uncertainty in the United States, most notably surrounding the future political environment, global capital flows continue to benefit the Americas region, particularly the U.S. market. Offshore investment remains at elevated levels with nearly US$59 billion of foreign acquisitions in 2016, accounting for 11.3 percent of full-year 2016 U.S. acquisitions.
The Americas region saw approximately US$78 billion in transaction volumes in the fourth quarter of 2016 and a moderate decrease of nine percent from previous year record levels – excluding entity-level deals – to US$285 billion for the year. Within the United States, investment volume in the fourth quarter approached US$73 billion, a decrease of six percent year-over-year.
Foreign capital is likely to remain active for core office assets in the United States where investment strategy and buyer motivations will be driven not only by a search for yield, but also as a hedge against currency and political risk.
Outside of the United States, Brazil rebounded from the historically low levels that had dominated over the first three quarters of the year. Fourth quarter volumes reached US$1.2 billion, and represented over 75 percent of full-year activity.
In Canada, fourth quarter investment volumes were down, on a year-over-year basis, but volumes were quite diversified by sector and full-year volume drew close to even with 2015 activity. Mexico also experienced a drop in fourth quarter investment volumes year-over-year, but total transaction activity for 2016 overall declined only modestly from the year prior, although volumes do remain notably off recent historical averages.
Stabilized and increasingly optimistic investor sentiment is expected to sustain current investment sale levels in the Americas region in 2017. Following three record years of single asset sales, increased portfolio transactions will be a key factor for gains in 2017 and into 2018.