Impact on Sales Volume
How did sellers respond to the capital gains inclusion rate hike? Discover the strategic moves that defined Q2 in Commercial Real Estate. This quarter, a lot of buzz surrounded the capital gains inclusion rate increase. Many sellers were keen to divest their assets before the June 24th deadline. Now that the quarter is over, let’s dive into the data and see the impact on deal volume.
Key Insights:
- Consistent June Activity:
- Historically, June is a strong month for deals, with about 41% of Q2 deals closing in June on average.
- Last year, 60% of Q2 deals were closed in June. This year, we saw a similar trend with 62%.
Significant Uptick Before Deadline:
- Since 2015, an average of 6% of Q2 deals closed in the 7 days leading up to June 24th, with a peak of 17% last year.
- This year, a remarkable 54% of deals closed in that same 7-day period.
This surge is no coincidence. It reflects strategic timing by sellers to meet the deadline.
What’s Next? Will this be a one-time spike, or is there renewed life in the commercial real estate market? With another interest rate cut announced yesterday, we might see sustained activity through 2024.
Chart: Impact of the Capital Gains Inclusion Rate on Q2 Industrial Real Estate Sales