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The recovery in commercial real estate has been slow and difficult, as has interest rate policy over the past few years. Of course, the two are deeply connected.
After coming out of the pandemic, it’s been a rough year. According to monthly data provided by Moody’s to the media exclusively at CNBC’s Property Play, October 2024 was the first month of year-over-year transaction volume growth since receipts for a Fed rate hike began. It tracks the top 50 commercial real estate, or CRE, property sales across the United States.
Contract volume growth turned positive in the early part of last year and was even reaching pre-prep levels by the end of the year.
“A very bearish, negative growth slip in October 2025 in CRE capital markets reflects a stalemate between buyers and sellers,” said Kevin Fagan, head of CRE capital market research at Moody’s. “The low end of the U-shaped recovery in 2023 has been lengthened by persistently high interest rates and policy and economic uncertainty in 2025.”
But October was still an active month. Sales totaled $24.4 billion, about 70% of October 2019 sales. Total dollar volume is still higher this year than last year, but growth has slowed significantly since 2023.
Looking at specific property trends, industrial and multi-family led the top 50 deals. Hotels were the only sector to improve in deal volume compared to last year. It saw 6% growth after a negative third quarter.
One notable sale: The New York Edition Hotel at 5 Madison Avenue was sold by the Abu Dhabi Investment Authority, a sovereign wealth fund, to the Kam Sang Company, a real estate development firm, for $231.2 million.
“The New York Edition Hotel is interesting because both the selling price is so high, a central sovereign wealth fund coming out of NYC, and the history of the building,” Fagan said, “It was originally an office building called the MetLife Clock Tower and was the tallest building in the world for about three years from 1910 to 1913.
Met Life Clock Tower and Pedestrian Bridge, Madison Avenue, New York.
Images of Education | Universal Images Group | Getty Images
Both the Clock Tower and the Woolworth building, which were once the tallest in the world, were converted to a hotel and residence around 2013 respectively.
“They’re nearly as useless as offices, but as valuable as a hotel and an apartment building, respectively,” Fagan added.
Meanwhile, the multifamily segment saw the biggest pullback in October, down 27 percent from 2024. It was showing volumes that were higher than pre-Covid levels in the previous four months, and, despite the pullback, buildings mostly traded at a premium to previous sales.
The office continued its rocky recovery with either waivers or property swaps as part of the story.
According to Fagan, the top October sale was for Weill Cornell’s Sotheby’s headquarters, which probably meant repurposing into a health care or medical office.
New York Life picked up a distressed Manhattan office building from BGO in 2015 for about half of its last sale price.
“This shows that there is institutional interest in offices selling at a discount, reinforcing the long-term value floor for office buildings in good markets, and the recognized sustainable utility of such properties,” Fagan said.
