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he article first appeared in CNBC’s Property Play newsletter with Diana Olick, which highlights emerging real‑estate opportunities for investors ranging from individuals to large institutional players. Sign up to receive future editions directly in your inbox.
Commercial real‑estate transactions are struggling in 2025 after a strong post‑pandemic rebound. Deal volume remains below pre‑COVID levels, with total dollar value up only 5% from the previous year as of Q3, according to Moody’s exclusive data that tracks the top 50 U.S. CRE sales. September’s data reveal three key trends: a shift toward higher‑quality assets, a sharp decline in hotel deals, and renewed interest in office and retail properties.
The “flight to quality” is evident in September’s average sale price of $12.7 million, up from $11.2 million over the prior two years. Of the 50 largest deals, 29 exceeded $100 million, and the volume of such large transactions rose 35% year‑over‑year, while smaller deals have stagnated or shrunk. Moody’s Kevin Fagan notes that after the 2022‑2023 Fed rate hikes, 2024 saw significant volume growth, but 2025’s uncertainty has stalled that momentum, especially for high‑quality properties that continue to attract capital from sources like sovereign debt funds.
The hotel sector remains the only asset class with a notable decline, with deal value down 30% in September versus the same month in 2024. The drop reflects reduced international and business travel, leading lenders and investors to shy away from hotel assets. Fagan explains that companies are trimming margins by cutting travel, which further dampens hotel demand.
Office space, however, has seen a rebound. Apple invested $365 million in a Sunnyvale, California portfolio; Nvidia spent $83 million on a Santa Clara building; and MetLife secured an office property in Newport Beach at a 39% discount. Fagan comments that sellers are increasingly willing to accept lower prices, allowing cash‑rich tech firms to acquire campuses at attractive rates—a trend also seen with Microsoft’s recent Seattle purchase.
Retail has emerged as another winner, particularly open‑air strip centers with restaurants. In September, investors such as Nuveen, Tanger, InvenTrust Properties, and MCB Real Estate collectively committed nearly $500 million to retail assets. Nuveen’s global real‑estate head, Chad Phillips, says the sector offers strong, risk‑adjusted returns because purchases are made well below replacement cost, and the properties serve essential consumer needs that remain resilient even amid waning confidence.
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