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Economy

Financing Availability Provides a Floor for US Prices

Source: https://www.rcanalytics.com/refi-capital-flows-fy-2020-usct/

On Thursday, April 8 at 1pm ET, listen to Real Capital Analytics Senior Vice President Jim Costello as he reviews the latest trends in the U.S. debt market.

Deal volume contracted in 2020 due to economic uncertainty but did not result in a price collapse like that seen during the Global Financial Crisis (GFC). Capital flowing into other structures helped support pricing during this downturn.

Into the second quarter as new acquisitions fell, financing activity picked up some of the slack in the capital stack. The value of properties refinanced represented 61% of all capital flows to commercial real estate in the quarter. This figure was well above the 19% share represented by new acquisitions.

The inability to refinance cash-flowing properties was a problem during the GFC. In this Covid-19 recession, however, the ability to refinance and not sell has led to sticky prices. Owners facing challenges are not forced to sell and have largely been able to refinance.

Into the second half of 2020, financing availability put a floor under the worst possible price declines and the share of capital flows from new acquisitions grew from a 28% share of the market in the third quarter up to a 41% portion in the fourth quarter.

Since 2016, construction activity has averaged 20% of all capital flows. Into the final quarter of 2020, however, the share retreated to only 16% as construction starts pulled back for the property sectors most impacted by the pandemic.

To learn more about the data behind this article and what Real Capital Analytics has to offer, visit https://www.rcanalytics.com/.

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Data is changing the speed of business. Investors, Corporations, and Governments are buying new, differentiated data to gain visibility make better decisions. Don't fall behind. Let us help.

DATA PROVIDER SPOTLIGHT

ForwardKeys

ForwardKeys is one of the leading travel analytics firms that provides investment firms with alternative and predictive data on the travel industry. Data is offered both on the demand and the offer-side of the aviation market.

Actual Air Reservations is an aggregation of flight bookings made via the Global Distribution Systems. Exclusive agreements make that global travel data is available, including regions that are generally difficult to track. This data contains valuable insights into the profile, behaviour, and impact of events on past, present and future air travellers.

Seat Capacity provides insights into the scheduled flights from 99% of global commercial airlines.

Financial institutions use this data for artificial intelligence and predictive models to forecast the performances of businesses. Combined, the datasets can provide insights into the financial health of businesses operating in the travel and tourism industry. This list contains companies like airlines, airplane leasing companies, oil companies, hotels and travel agencies.