Although Avison Young's report for the third quarter of 2026 indicates a 17.9 per cent increase in US transaction volume compared to the same period last year, the consequences of the recent interest rate rises will only be reflected in the figures with a time lag. The yield on ten-year US Treasury notes crossed the 5 per cent mark on 15 September. Across the residential, office, retail, development and logistics sectors, transaction volume totalled 389.3 billion dollars in the first three quarters of the year. Against this backdrop, Avison Young adjusted its full-year forecast slightly downwards to 520 billion dollars. Whilst this would exceed the previous year's figure of 483 billion dollars, it remains well behind the cyclical high of 805 billion dollars recorded in 2021.
Delayed effects in transaction statistics
According to James Nelson, Principal and Head of U.S. Investment Sales at Avison Young, pure sales statistics primarily serve as a rear-view mirror of the market. A transaction recorded in the quarterly figures was typically negotiated around six months earlier. Drafting and signing contracts often takes a month, whilst securing debt capital can currently require 90 to 120 days. The September surge in interest rates is therefore expected to show up in official sales figures only in the first quarter of next year.
Nelson considers the volume of preliminary contracts currently signed to be a far more reliable leading indicator of market activity. Unlike in the residential segment, where platforms such as StreetEasy or reports such as the Olshan Report in New York capture deals promptly, an estimated one-third only of ultimately sold commercial properties becomes public via portals such as CoStar or LoopNet. However, the brokerage firm's own transaction activity indicates that the market has by no means ground to a halt.
- —In New York City, the sales team has signed six binding contracts since mid-September, matching the usual monthly average.
- —In the greater Atlanta area, the Milton Park office property went under contract at the originally agreed purchase price.
- —The Miami team recorded the sale of the Blue Lagoon Shoppes retail centre for $28 million, alongside a land transaction of $13.2 million.
- —In South Carolina, a client acquired an industrial property at 3560 State View Boulevard in Fort Mill for $28.4 million.
Divergent performance across asset classes
Nelson does not expect a dramatic slump in overall activity. Sellers and lenders who had previously speculated on interest rate cuts are now showing an increasing willingness to transact. Following the return of ten-year US Treasury yields below the 5 per cent threshold, bidders who initially demanded price discounts of 10 to 15 per cent must also take a more competitive approach to their underwriting. In addition, sufficient debt capital remains available in the market at tight credit spreads.
However, the effects of interest rate levels depend heavily on the specific asset class. Properties with long-term fixed cash flows, such as retail spaces with lease lengths of ten or more years, react immediately to increased financing costs. In the case of office and multi-family residential buildings with shorter lease terms, strong rental growth cushions yield expansion, particularly in major cities such as New York and San Francisco, where office rents are rising noticeably. In the south-eastern US, by contrast, persistent tenant concessions in the residential sector are dampening pricing.
