Courtesy Real Capital Analytics

In most commercial real estate sectors, deal volume fell in the first half of 2016. Apartment transaction volume, however, continued to increase in the second quarter, climbing 5% year over year, to $32.7 billion. In comparison, in 2015’s second quarter, transaction volume grew more than 30%, according to Real Capital Analytics (RCA).

What RCA calls “megadeal” activity helped fueled the growth this past quarter. In nonmajor metros, megadeals jumped 54% year over year.

“The apartment sector stands out from others not just on overall deal volume but also for portfolio- and entity-level transactions,” RCA wrote. “2015 was the year of the megadeal, but such transactions across all sectors are 40% off of the first half of 2015's high levels. For apartments, however, this activity is up 37% YOY.”

In the six major coastal metros, single-asset deals moved up only 1%.

Though RCA says financial turmoil pushed prices down in the first quarter, things have recovered. Nonetheless, RCA notes:

“Even though price growth has resumed, transaction activity suggests investors have moved to a risk-off stance. Deal activity is shifting to major markets and mid- and high-rise assets that are viewed to have better exit liquidity.”

RCA adds that institutional investors are moving back into the market as they seek secure assets, while others are leaving. The flight to security actually helps the apartment sector, with the exception of the six major metros, which saw deal activity fall 4% in the second quarter.

“Across property sectors, volume trends into Q2 ’16 suggest a move toward a risk-off stance on the part of investors,” RCA wrote. “Apartments are viewed as a lower-risk asset, and investment activity is up across all major geographies and subtypes save the mid- and high-rise segment in the six major metros.”