SAN FRANCISCO — Real estate money managers are selling their holdings at a furious pace, according to a new report by Global Real Analytics LLC, a San Francisco-based research and indexing firm.
In the third quarter, real estate transactions totaled more than $62.8 billion, up from a $55 billion in the second quarter and $45 billion in the first quarter, according to the firm's National Real Estate Index.
This was the most in 20 years, said Daniel O'Connor, managing director of global forecasting. For the 12 months ended June 30, 2005, transactions skyrocketed 91.9%. In the 12 months ended June 30, 2004, transaction volume increased only 31%.
"I don't think institutional managers are in the property-flipping business, but it may be a nice time to sell property," Mr. O'Connor said. "There remains a ton of capital in the marketplace from almost all sources."
What's more, money managers are selling real estate after relatively short periods of ownership, he said. For example, Bank of America sold a property in San Francisco last quarter after owning it for only 15 months, a relatively short period for an institutional money manager, Mr. O'Connor said.
More real estate was bought and sold in the apartment sector than any other property type in the third quarter, with more than $19 billion in transactions — 57% more than in the second quarter, according to the report. All this activity — 30.6% of the total volume — resulted from anticipated rent increases, higher mortgage rates and increased conversions of apartments to condominiums, Mr. O'Connor said.
Suburban office properties also gained some momentum, representing 20% of total transaction volume, followed by retail, which accounted for 16%.