A model of this text first appeared within the CNBC Property Play publication with Diana Olick. Property Play covers new and evolving alternatives for the actual property investor, from people to enterprise capitalists, non-public fairness funds, household places of work, institutional buyers and huge public firms. Enroll to obtain future editions, straight to your inbox.
Business actual property dealmaking is having a tough 2025, after gaining vital momentum popping out of the pandemic. Transactions are nonetheless occurring, however they’ve stalled at properly under pre-Covid ranges.
The general greenback worth of offers has grown simply 5% from final yr as of the third quarter, in line with new month-to-month information offered by Moody’s as a media unique to CNBC’s Property Play. It tracks the highest 50 CRE property gross sales throughout the U.S.
Tendencies in September reveal a number of themes: Flight to high quality, financial uncertainty hitting the resort sector arduous, and a rising curiosity in two beleaguered sectors — workplace and retail.
The flight to high quality will be seen within the common greenback measurement of gross sales in September, as much as $12.7 million, in contrast with the common of $11.2 million over the 2 years prior.
Of the 50 high offers closed, 29 had been for over $100 million. The quantity of $100 million-plus offers within the third quarter was up 35% over final yr, whereas the amount of smaller offers has been flat or shrinking.
“We had numerous quantity progress, restoration, after the primary Fed price hikes in 2022-2023. 2024 was a reasonably good yr,” mentioned Kevin Fagan, head of CRE capital market analysis at Moody’s. “We noticed vital quantity growth, and that actually has paused given all of the uncertainty in 2025, albeit for giant transactions, which are usually the upper high quality properties.”
Fagan famous that there’s way more certainty amongst buyers in larger high quality properties, and that is why they’re seeing cash flowing in from a number of sources, together with sovereign debt funds.
One obvious weak spot is within the resort sector, with deal worth down 30% in September in contrast with the identical month in 2024. That was the one asset class to publish a big decline final month, doubtless resulting from a drop in worldwide and enterprise journey.
“Numerous firms are chopping margins, and one of many methods they do that’s to have much less forms of sure journey,” mentioned Fagan. “So, actually feeling the avoidance of resort property amongst lenders and buyers, and that is displaying up within the quantity information this month.”
Whereas hospitality took successful, workplace notched a win.
In September, Apple spent $365 million on an workplace property portfolio in Sunnyvale, California. Nvidia spent $83 million on a single workplace constructing in Santa Clara, California. In the meantime, Metlife acquired a roughly 39% low cost deal on an workplace property in Newport Seaside, California.
“That is been a reasonably typical quantity for workplace, the place you see sellers sort of chucking up the sponge lastly,” mentioned Fagan. “Provided that sort of low cost, a few of these firms, particularly massive tech firms with numerous money, can scoop up their very own campuses and for a comparatively low cost value. In order that has been a little bit of a development. We noticed Microsoft try this in Seattle lately as properly.”
One other large winner in September was open-air retail. Consumers together with Nuveen, Tanger, InvenTrust Properties and MCB Actual Property collectively poured just below half a billion {dollars} into retail properties throughout the month, principally open-air strip facilities with eating places. That is a giant guess on the buyer at a time when confidence is waning.
Nuveen’s world head of actual property, Chad Phillips, informed Property Play final week that he has been leaning closely into open-air strip facilities for the previous two years.
“The full returns are good. You are shopping for at far lower than substitute value. So you set all of it collectively, and it is a very resilient, important actual property want the place we will make sturdy, risk-adjusted returns,” mentioned Phillips.
