In the second quarter overall sales volume eclipsed the pre-pandemic quarterly average, an important milestone in this cycle. While investment in multifamily and industrial as a total share of volume is higher than usual, liquidity is improving in office, as seen in recent Real Capital Analytics data. The question is, how sustainable is this volume? And based on fundraising and capital waiting on the sidelines, there is room to run.

The latest Preqin data reports a total of $362.6 billion is available to be deployed for global investment in real estate, 10% less than year-end 2020 levels. However, funds primarily targeting North America have $229.4 billion available, which is in line with year-end 2020 figures. The share of total capital targeting North America, topping 63%, is the highest it has been since the early-to-mid-2000s.

There’s a clear recipe for strong investment for the rest of the year and into 2022. Two major factors are persistently low interest rates driving investors to seek yield in real estate, and potential tax changes that could lead to sales by year-end. Others include real estate’s historical ability to act as an inflation hedge, investors targeting economic growth/job drivers, and population migration. The amount of capital waiting for investment suggests continued strength in sales to come.