“The fact that deal volume continues to fall for the apartment sector, as with most other sectors, reflects the notion that that easiest yield opportunities have been squeezed out of the market,” according to RCA. “It was easy to get buyers and sellers to come together on deals in 2014 and '15 when cap rates were above 6% and falling. With the average cap rate coming in at 5.6% in July 2016—and few expecting further compression—it is harder to sustain the same pace of growth in deal activity.”

An exception to the rule was industrial, up 10% Y-O-Y and 12% YTD. Even so, RCA attributes industrial's growth on a dollar-volume basis to a single entity-level transaction: Ivanhoé Cambridge's acquisition of the Evergreen Industrial platform from TPG Real Estate. The buyer didn't disclose financial terms when announcing the deal in mid-July; however, RCA data put it at $918 million. Absent that sale, deal volume for industrial would have been down 12% Y-O-Y, although still up on a YTD basis.

However, the fact that the sale occurred illustrates what RCA calls “the consumer transition from bricks to clicks.” All of the assets in the Evergreen portfolio fall under the heading of last-mile logistics, i.e. the sort of infill warehousing that makes same-day delivery feasible.

In fact, volume for portfolio and entity-level deals fell 21% Y-O-Y across all property types, RCA says, although single-asset sales posted an even sharper decline of 30% from the year-ago period. Megadeals represented 21% of all deal activity for the month, roughly the same share that has been seen throughout the first six months of the year.

“As total deal volume shrinks though, the impact of one of these deals can have an amplified effect on monthly activity,” according to the Big Picture USCT. “One should expect more stories of sudden growth later this year from other property sectors due to a single megadeal.”

Longer term, July's results might be seen in terms of a market normalization than a decline. “Since 2001, the mean July deal volume has stood at $24.7 billion,” according to RCA, meaning that last month's deal volume was about average.

NEW YORK CITY—With all but the industrial sector posting year-over-year declines, investment volume in the US dropped last month to the lowest total for a July since 2011, Real Capital Analytics said Friday. “Investment volume is typically lighter in the summer but the pace of activity for this July was weaker than in recent years,” according to the latest US Capital Trends report from RCA.

Deal volume for transactions valued at $5 million or more came in at $26.5billion for July, down 28% Y-O-Y. As recently as 2015, deal volume for July stood at $40.4 billion, according to RCA.

Within that total, apartment sales accounted for more than one-third of the total at $10 billion for the month. However, that's off 3% from the year-ago period and down 15% year to date.

Multifamily volume was ahead of all other property types in July, RCA says, “but not for reasons one might wish. The apartment sector remains the largest, most liquid investment market in the US, but only because other sectors are falling more sharply.” On a Y-O-Y basis, hotel sales were down 37%, the office sector was off by 43% and retail investment sales plunged 54%.

“The fact that deal volume continues to fall for the apartment sector, as with most other sectors, reflects the notion that that easiest yield opportunities have been squeezed out of the market,” according to RCA. “It was easy to get buyers and sellers to come together on deals in 2014 and '15 when cap rates were above 6% and falling. With the average cap rate coming in at 5.6% in July 2016—and few expecting further compression—it is harder to sustain the same pace of growth in deal activity.”

An exception to the rule was industrial, up 10% Y-O-Y and 12% YTD. Even so, RCA attributes industrial's growth on a dollar-volume basis to a single entity-level transaction: Ivanhoé Cambridge's acquisition of the Evergreen Industrial platform from TPG Real Estate. The buyer didn't disclose financial terms when announcing the deal in mid-July; however, RCA data put it at $918 million. Absent that sale, deal volume for industrial would have been down 12% Y-O-Y, although still up on a YTD basis.

However, the fact that the sale occurred illustrates what RCA calls “the consumer transition from bricks to clicks.” All of the assets in the Evergreen portfolio fall under the heading of last-mile logistics, i.e. the sort of infill warehousing that makes same-day delivery feasible.

In fact, volume for portfolio and entity-level deals fell 21% Y-O-Y across all property types, RCA says, although single-asset sales posted an even sharper decline of 30% from the year-ago period. Megadeals represented 21% of all deal activity for the month, roughly the same share that has been seen throughout the first six months of the year.

“As total deal volume shrinks though, the impact of one of these deals can have an amplified effect on monthly activity,” according to the Big Picture USCT. “One should expect more stories of sudden growth later this year from other property sectors due to a single megadeal.”

Longer term, July's results might be seen in terms of a market normalization than a decline. “Since 2001, the mean July deal volume has stood at $24.7 billion,” according to RCA, meaning that last month's deal volume was about average.