A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. After a promising 2025 for commercial real estate transaction volume, this year has started with a bang. The highlight of the month of January was the big sales made by Blackstone. Blackstone appears to be rebalancing its portfolio, selling its existing assets and moving into data centers, high-end apartments and logistics. For the top five real estate sectors, total transaction volume in January was $20.8 billion, a 15% year-over-year decline, according to monthly data provided by Moody’s as an exclusive media outlet to CNBC’s Property Play. It tracks the top 50 commercial real estate property sales in the United States, across the major segments of multifamily, office, industrial, retail and hospitality. January also marked the lowest deal activity in terms of sales numbers since April 2024, indicating that while large institutional deals are being completed, mid-market volume is being impacted by tighter credit standards and bid-ask spreads. “January 2026 marked a slow start to the year for CRE transaction activity,” said Kevin Fagan, head of CRE capital markets research at Moody’s. “The market is still grappling with hopes and dreams of interest rate stabilization, general economic and political unrest, a growing bifurcation of real estate sectors, and a search for yield that has made esoteric and more complex transactions commonplace.” Demand and liquidity are definitely there, but in a persistently high interest rate environment, “the era of ‘expand and pretend’ is gradually giving way to forced recapitalizations and strategic portfolio pruning,” he said. Investors are now favoring logistics, multifamily and alternative assets, such as data centers and student housing. While the office sector is slowly recovering, transaction volume is further away from its pre-Covid norms. However, industrial demand is only 11% below its previous demand level. For example, the third largest transaction of the month was the sale of The Brickyard in Los Angeles to Clarion Partners for $412 million. This is a large footprint infill logistics site, providing insight into how much institutional capital is willing to pay for it. The month’s biggest deal, Blackstone’s sale of Park Avenue Tower to SL Green for $730 billion, showed that while demand is returning for office space, it’s only for trophy offices and assets at bargain prices. Another office sale, Seattle’s Westlake Tower, considered an obsolete property, was sold in a foreclosure transfer at a deep discount. As was the case in December, although volume was down across all segments, large transactions, above $100 million, saw positive year-over-year growth. “This highlights a very significant liquidity market in which mega-funds, sovereign wealth, private equity and some REITs deploy their capital only in large-scale, high-conviction assets,” Fagan said, using the abbreviation for real estate investment trust. “Debt capital is readily available to top-tier sponsors purchasing high-end assets, eliminating middle-market syndicators.” The second-largest transaction of the month, Blackstone’s $424.4 million sale of the Skyview Park mixed-use development in Queens, New York, to TPG, speaks to private equity’s enthusiasm for high-density cash flow in prime markets. Blackstone also sold Streets of Woodfield, a suburban Chicago shopping center, to Hutensky Capital for $69 million. Another growing trend in the deal report is the government’s purchase of warehouses for U.S. Immigration and Customs Enforcement’s immigration detention centers. The General Services Administration and ICE bypass traditional leasing models and purchase properties directly. ICE acquired a warehouse in Williamsport, Maryland, for $102.4 million, and the Surprise Pointe Commerce Center in Arizona for $70 million, with plans to convert them into detention centers. Correction: This story has been updated to remove inaccurate information from Moody’s on commercial real estate sales to Blackstone in January.