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Preqin: Q3 private equity real estate deal activity drops substantially YOY

Private equity real estate transactions during the third quarter totaled 2,044 with a combined value of $98 billion, a substantial drop from the year-ago figures of 2,410 deals with an aggregate value of $120 billion, according to the latest data from Preqin.

The total number of third-quarter transactions dropped across each property type on a yearly basis, even in core property sectors where the majority of the investments are historically made.

The number of deals in North America and Europe fell year over year to 1,428 and 525 from 1,727 and 590, respectively.

Fundraising in the private real estate space remains solid, with $121 billion secured so far in 2019, paving the way for the year to break the annual fundraising record.

The third quarter saw the closing of 48 funds, securing $37 billion of capital commitments at an average of $843 million per fund. Notably, private equity giant Blackstone Group Inc.'s Blackstone Real Estate Partners IX LP raised $20.5 billion to become the largest private real estate fund ever.

According to Preqin, 28 North America-focused funds accounted for 76% of the total capital raised, with investors still favoring value-added and opportunistic strategies. Among private real estate funds closed so far in 2019, two-thirds have either achieved or exceeded their targets.

As of October, there are 856 funds in market across the globe, seeking a combined $251 billion from investors.

Preqin said the final quarter of 2019 is "shrouded in uncertainty," with the threat of slowing economic growth and growing political risk. "Investor appetite for the asset class persists, and the dry powder is there, waiting to be spent on the right deals," it added.