Commercial Real Estate Transactions Slow, But Office and Open Air Retail Sectors Shine

The commercial real estate (CRE) market in 2025 is experiencing a slowdown, with transaction volumes and deal values significantly below pre-COVID levels. New data from Moody’s shows a modest 5% increase in the dollar value of commercial deals in the third quarter compared to last year, signaling a noticeable slowdown from the post-pandemic recovery period.
One of the most significant trends in the current CRE environment is the flight to quality. Despite overall market stagnation, investors are increasingly drawn to larger, higher-value deals. This is reflected in the rise in average deal size to $12.7 million in September, up from $11.2 million in the previous two years. Institutional investors and sovereign wealth funds are particularly interested in premium properties, which are seen as safer bets in a turbulent economic climate. The number of transactions exceeding $100 million has surged, highlighting the preference for higher-quality assets amid economic uncertainty.
The hotel sector, on the other hand, is facing significant struggles. In September, hotel transaction values dropped by 30% compared to the same time in 2024, primarily due to the ongoing decline in business and international travel. The rise of remote work and companies cutting back on travel expenses has put pressure on demand for hotel spaces. As a result, hotels are seeing decreased investor interest, making them one of the hardest-hit sectors in CRE right now.
Meanwhile, the office sector is seeing some unexpected wins, particularly among tech giants. Companies like Apple and Nvidia have seized opportunities to purchase office spaces at significant discounts. For example, Apple acquired an office portfolio for $365 million, while Metlife secured a 39% discount on an office property in Newport Beach. The office sector, despite the broader challenges and the shift to remote work, is becoming a more attractive market for tech companies looking to expand or consolidate operations in more affordable real estate markets.🔍 If you’re looking to get the best possible mortgage in the U.S. for Foreign Nationals and Americans, and want to run an auction between more than 3,000+ lenders, click here👇

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