Along with slim pickings at the institutional-grade end of the market, properties at the other end of the spectrum—distressed assets—haven’t been set out on the shelves at nearly the rate many in the industry expected. Citing Real Capital Analytics data, PwC notes that sales of troubled properties have accounted for only 25% to 30% of the industry’s total volume.

However, when it comes to distress, the correlation between volume of assets and number of sales is not as strong as you might think, according to PwC. The low percentage of distressed trades is actually “a greater reflection of investor preference than of offerings as most buyers steer clear of ‘junk’ and focus on core assets,” the report says. “In fact, strong competition among well-capitalized buyers has elevated sale prices and lowered overall cap rates for many prime properties.”

The report finds varying conditions for the property sectors. Retail, it says, continues to struggle despite encouraging economic data for retail sales and job growth. One reason is that much of that job growth is in temporary hires. In office, notwithstanding a declining vacancy rate in several major markets, surveyed investors expect a slow rebound for the sector.

The industrial market has begun to stabilize, and therefore quality warehouse assets are seeing multiple bids and strong interest from perspective buyers. Leading the recovery is the apartment sector, as reflected in an uptick of transactions. The report says multifamily sales volume for the first quarter of 2010 nearly doubled to $4.3 billion from the same time period a year ago, based on RCA data.