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The recovery in commercial real estate has been slow and turbulent, mirroring the interest rate policy of recent years. Of course, the two are deeply linked.
After gaining considerable momentum following the pandemic, this year has been difficult. October was the first month of negative year-over-year transaction volume growth since the start of the recovery from the Fed’s rate hike in early 2024, according to monthly data provided by Moody’s as an exclusive media outlet on CNBC’s Property Play. It tracks the top 50 sales of commercial real estate, or CRE, properties in the United States.
Transaction volume growth turned positive early last year and was even approaching pre-Covid levels by the end of the year.
“More than a looming slowdown in CRE capital markets, the slide toward negative growth in October 2025 reflects the impasse facing buyers and sellers,” said Kevin Fagan, head of CRE capital markets research at Moody’s. “The trough of the U-shaped recovery from the low volumes of 2023 has been extended by persistently high interest rates and the political and economic uncertainty of 2025.”
But October remains an active month. Sales were $24.4 billion, or about 70% of October 2019 sales. Total dollar volume is even higher this year than last, but growth momentum has slowed significantly since 2023.
When it comes to specific real estate trends, the industrial and multifamily sectors lead the top 50 transactions. The only sector to see an improvement in transaction volume compared to last year is hospitality. It recorded growth of 6% after a negative third quarter.
Landscape view of the Metropolitan Life Insurance Company Tower, North Building and 41 Madison, located along Madison Park in the Flatiron District of Manhattan in New York City.
Brian Logan | Istock | Getty Images
One notable sale: The New York Edition Hotel at 5 Madison Avenue was sold for $231.2 million by the Abu Dhabi Investment Authority, a sovereign wealth fund, to the Kam Sang Company, a real estate development company.
“The New York Edition Hotel is interesting both because of its very high sale price, the withdrawal of a Middle Eastern sovereign wealth fund from New York and the history of the building,” Fagan said, noting that 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.
The clock tower and the Woolworth Building, which was also once the tallest in the world, were converted into a hotel and residence respectively starting around 2013.
“They are almost worthless as offices, but extremely valuable as a hotel and apartment building, respectively,” Fagan added.
Meanwhile, the multifamily segment saw the largest decline in October, down 27% from 2024. It had volumes above pre-Covid levels in the previous four months and, despite the decline, buildings were mostly trading at a premium to previous sales.
Office continued its rocky recovery, with property discounts or conversions as part of the story.
The biggest sale in October was Sotheby’s headquarters in Weill Cornell, which likely means a repurposing for health care or medical practice, according to Fagan.
New York Life acquired a troubled Manhattan office building from BGO for nearly half of its last sale price in 2015.
“This shows that there is institutional interest in office space sold at a discount, reinforcing the long-term floor value of office buildings in good markets, and the recognized sustainable utility of these properties,” Fagan said.