The nuance is this: Investor sentiment remains strong, as the Brookfield deal illustrates, and dry powder is accumulating at a rapid clip with fundraising by private closed-end real estate funds reaching its highest first-half level at $80.3 billion. Dry powder now stands at a record $331 billion, JLL said and funds closing in H1 2019 were oversubscribed by an average of $167 million or 7% more than initially targeted. The issue for many, if not most, of these funds is the difficulty in sourcing product that meets their investment criteria.

As quality deals become scarcer, investors and asset managers are seeking out new markets often going beyond the US to find yield. Also, according to JLL, negative currency-hedging effects have made acquisitions in the US more expensive. This is not to say the US has lost its allure with foreign investors. On the contrary, the US accounted for 53% of global CRE investment year-to-date with high growth in multifamily and office investments, which made up 67% of total US transactions in Q2, according to CBRE. In fact, CBRE reports that there was an uptick of cross-border investment in the US for the first half of the year, driven by investors from Canada, Israel, Germany and UAE.

Still, it turned out that Paris was the largest recipient of foreign capital during the first half of the year, according to JLL, following a flood of cross-border money entering the city during the second quarter. Specifically, JLL notes that activity was heavily concentrated in the office sector as European and South Korean groups targeted assets in the CBD and La Défense submarkets.

There have been other changes in this year’s cross-border flows. China’s outbound investment has diminished in part due to increased regulator pressures while South Korea’s investment outflows were elevated as groups increasingly pursue assets in Continental Europe.

Despite the activity in the Asia Pacific and Europe, JLL expects that global investment in CRE will decrease about 5% to 10% this year to reach $730 billion. The weak spots, it said, will be the EMEA region and a slowing momentum in the Americas.

CBRE’s Global Chief Economist Richard Barkham is a bit more sanguine about the remainder of the year. “With some slight improvement in the US economy and central banks cutting interest rates, prospects for the remainder of the year are good,” he says in prepared remarks. “A continued buoyant US market, coupled with restored fiscal expansion and monetary easing around the world, potentially supports a stronger second half of global investment activity.”

CBRE has its own set of numbers to measure global CRE’s investment performance for the first half of the year and while they differ somewhat from JLL’s they too point to a downward trajectory in investment sales. Global investment volume totaled $428 billion in H1 2019, down by 10.6% from H1 2018, it said. Q2 volume increased from Q1 across all regions but overall fell by 7.5% year-over-year, including entity-level deals. Only the Americas region reported year-over-year growth (0.7% to $128 billion). Transaction volume did drop in the Americas, though, for the first half of the year: totaling $235 billion, down 5% from H1 2018. As for the rest of the world, activity was down from last year by 17% in EMEA and 14% in APAC, according to CBRE.

EMEA investment volume totalled $74 billion in Q2, according to CBRE, with transactions falling heavily heavily in the UK (-50%), Netherlands (-35%) and Germany (-36%) but increasing in the smaller markets of Italy, Poland and Belgium. In the first half of the year, EMEA investment volume totaled $136 billion, down by 19% from H1 2018. Approximately 65% of EMEA’s reduced volume was in the UK and Germany. France maintained the same investment volume as in H1 2018, CBRE said.

The carnage was less pronounced in the APAC region, where investment volume totaled $29 billion in Q2. The region’s H1 total of $57 billion was down by 10.5% from H1 2018. Despite this slowdown, CBRE reports, Japan (+79%), Singapore (+73%) and South Korea (+11%) accounted for half of the region’s Q2 investment volume, while Hong Kong (-64%), Mainland China (-33%) and Australia (-23%) posted significant declines as slower economic growth and uncertainty lingered.

One investment type seems to have cut through these trends: the office gateway markets around the world. CBRE found that investments in these cities drove the Q2 rebound with Berlin, Tokyo, Boston and San Francisco all posting more than 50% year-over-year growth in the value of transactions. “With the global economy in the 11th year of what is officially the longest cycle on record, investors want stable trophy assets to secure cash flows and for potential downturn protection,” according to CBRE.