That has caused investors to curtail some activity, but Maher says it would be an exaggeration to term it a real pullback. In fact, investors should pick up the pace in the second half of the year, and full year 2017 volumes are likely to be down as little as 5%, which would make 2017 an above-average investment year.

“Pipelines are much bigger now than at the beginning of the year,” he says. At that time, many potential buyers felt uncertain about what direction the US would take under the Trump administration. Sudden changes to international trading agreements, for example, could have roiled the warehousing and product distribution sector, which has become the hottest property type due to the expansion of e-commerce. “That created a lull in the first quarter.”

“But the level of uncertainty has gone down,” he adds. The Trump administration, notwithstanding yesterday's healthcare vote, has brought about few major changes through legislation. And proposed changes on the table seem likely to get bogged down in procedural struggles. “There is also a lot of positive news about the stock market and consumer confidence; the fear of something bad happening to the economy or the real estate market has gone away.”

CHICAGO—Real estate market fundamentals in North America performed in line with expectations during the first half of 2017, but there was also a sharper-than-expected slowdown in transaction volume, according to a mid-year analysis by LaSalle Investment Management. Still, even though the US has recently seen below-trend economic growth, both the US and Canadian real estate markets continue to attract a high level of investor interest, and the US transaction level remains above the historical average.

“Transaction volume has slowed down in the gateway markets from very high levels,” Bill Maher, head of research and strategy for LaSalle's Americas division, tells GlobeSt.com. In 2017, many investors tried to boost yields by searching for deals in secondary markets. Inevitably, these deals tend to be smaller, and that helped bring down the overall transaction volume. “You're going from deals worth hundreds of millions of dollars to deals of 30 or 40 million.”

Trading volumes are down between 15% and 20% through April, according to LaSalle. But so far, Maher doesn't see much reason for concern.

“The market is acting rationally,” he says. Core returns have finally moderated after six years of double- digit gains, an unusual run of increases that “was not sustainable.” Core returns were about 13% in 2015, but sank to 8% in 2016. LaSalle expects returns will be between 6% and 8% this year, and then around 5% to 7% in 2018.

That has caused investors to curtail some activity, but Maher says it would be an exaggeration to term it a real pullback. In fact, investors should pick up the pace in the second half of the year, and full year 2017 volumes are likely to be down as little as 5%, which would make 2017 an above-average investment year.

“Pipelines are much bigger now than at the beginning of the year,” he says. At that time, many potential buyers felt uncertain about what direction the US would take under the Trump administration. Sudden changes to international trading agreements, for example, could have roiled the warehousing and product distribution sector, which has become the hottest property type due to the expansion of e-commerce. “That created a lull in the first quarter.”

“But the level of uncertainty has gone down,” he adds. The Trump administration, notwithstanding yesterday's healthcare vote, has brought about few major changes through legislation. And proposed changes on the table seem likely to get bogged down in procedural struggles. “There is also a lot of positive news about the stock market and consumer confidence; the fear of something bad happening to the economy or the real estate market has gone away.”