Commercial real estate deal-making slowed again in November, signaling that the post–rate-hike recovery is losing momentum. Transaction volume fell year over year for the second straight month, underscoring just how sensitive the sector remains to higher interest rates, policy uncertainty, and cautious lenders.
But this is not a market freeze.
Capital is still active — it’s simply becoming more selective. While overall deal count declined, larger transactions moved in the opposite direction. Sales above $100 million jumped sharply, and the average deal size climbed well above long-term norms. That tells us liquidity hasn’t disappeared; it has narrowed.
Investors are prioritizing scale, quality, and long-term demand. Class A assets, large portfolios, and properties tied to essential or structural growth themes are still attracting capital. Smaller, middle-ground deals, however, are being delayed as buyers and sellers struggle to align on pricing and financing assumptions.
Multifamily continued to lead activity, reflecting persistent housing demand in a market where renting remains cheaper than owning. Office deals, while fewer, showed clearer price discovery, with buyers stepping in at meaningful discounts for mission-critical or repositionable assets. Medical office and data centers stood out as quiet winners, supported by aging demographics and AI-driven infrastructure demand.
The message heading into 2026 is clear: commercial real estate is not collapsing — it’s recalibrating. Fewer deals are getting done, but the ones that close carry bigger conviction. In this environment, patience, clarity, and alignment with durable demand matter more than ever.
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