December CRE deal volume sinks further, office is a bright spot

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Commercial real estate deal volume fell in December for the second straight month, but the full-year numbers reveal some progress, potentially setting up much-needed momentum for this year.

Total deal dollar volume dropped 20% in December year over year, according to monthly data provided by Moody’s as a media exclusive to CNBC’s Property Play. It tracks the top 50 commercial real estate property sales across the U.S., in the core segments of multifamily, office, industrial, retail and hotel.

For all of 2025, deal volume was 17% higher compared with 2024, a healthy expansion but lower than the 24% annual growth seen the year before and still 30% below the 2019 pre-pandemic benchmark.

“The US commercial real estate (CRE) market in 2025 was defined by a steady, albeit decelerating, climb toward stabilization,” said Kevin Fagan, head of CRE capital market research at Moody’s. “The recovery proved resilient in the face of significant economic slowing, policy uncertainty, a massive loan maturity wall, and persistently high interest rates compared to three years ago.”

Leading the landscape were the multifamily and office sectors. The recovery in office has been swelling, as return-to-office orders and a boom in AI employment counter the pandemic-driven narrative that office is over.

Total office deal volume was up 21% in 2025 compared with the year before. Investors, however, continue to favor Class A or trophy assets, as the rest of the market struggles.

Multifamily, which has been seeing declining fundamentals, such as occupancy and rent, still led 2025 dealmaking, up 24% in deal volume from 2024. It benefited from higher mortgage rates in the single-family for-sale market, which kept more renters from becoming buyers.

Retail also saw a healthy gain of 19%. Fundamentals in the sector, especially grocery-anchored and necessity-based centers, were strong, fending off continued pressure from e-commerce.

“Retail has officially re-entered the conversation as a durable, investment-grade asset class, with investors more focused on the usual underwriting nuances than potential functional obsolescence and a ‘retail apocalypse,'” Fagan said.

Last year also saw something of a comeback for much beleaguered bigger dollar CRE deals. The volume of sales over $100 million was 23% higher than in 2024,…