The United States commercial real estate market demonstrated resilience in 2025, with total deal volume climbing 17% compared to the previous year. This growth occurred despite a slowdown in the final month of the year and persistent economic headwinds, including high interest rates and policy uncertainty.
While the annual expansion marks a positive step towards stabilization, the pace of recovery has moderated from the 24% growth seen in 2024. Overall, the market remains approximately 30% below its pre-pandemic benchmark set in 2019, indicating a recovery that is steady but still incomplete.
Key Takeaways
- Total commercial real estate deal volume increased by 17% for the full year 2025.
- Multifamily and office sectors were the primary drivers of growth, with volume up 24% and 21% respectively.
- Alternative sectors like data centers and medical properties saw record-breaking transactions.
- Large tech companies, including Apple and Amazon, were significant buyers, particularly in data center land and office campuses.
- Small-scale deals under $5 million have recovered strongly, now exceeding their 2019 pace by 4%.
A Market in Transition
The story of commercial real estate in 2025 was one of gradual recovery. The market navigated a complex economic landscape defined by elevated interest rates and a substantial number of maturing loans. According to Kevin Fagan, head of CRE capital market research at Moody’s, the year was defined by a “steady, albeit decelerating, climb toward stabilization.”
December saw a notable dip, with total deal dollar volume falling 20% year-over-year, marking the second consecutive monthly decline. However, the full-year figures provide a more optimistic picture of a market finding its footing.
“The recovery proved resilient in the face of significant economic slowing, policy uncertainty, a massive loan maturity wall, and persistently high interest rates compared to three years ago,” Fagan noted.
This resilience suggests that investors are adapting to the new economic normal, even if the era of ultra-cheap capital has passed.
Sector Performance Reveals New Priorities
A closer look at the market reveals a clear divergence in performance across different property types. The multifamily and office sectors led the charge, challenging some prevailing narratives from recent years.
Multifamily and Office Lead the Pack
Despite reports of weakening fundamentals like occupancy and rent growth, the multifamily sector remained the top performer in 2025. Deal volume surged by 24% compared to 2024. This strength was largely supported by the residential housing market, where high mortgage rates kept many potential homebuyers in the rental market.
The office sector also staged a significant comeback, with deal volume rising 21%. This growth counters the pandemic-era narrative that remote work would render office space obsolete. A combination of return-to-office mandates and a hiring boom in the AI industry has revitalized demand, particularly for high-quality spaces.
Focus on Quality
Investors in the office market are overwhelmingly favoring Class A or 'trophy' assets. While premier buildings are attracting capital, older or less desirable properties continue to face significant challenges.
Retail real estate also posted a solid 19% gain in deal volume. The sector has successfully weathered the e-commerce storm, with grocery-anchored and necessity-based shopping centers proving particularly durable. Fagan observed that retail has “officially re-entered the conversation as a durable, investment grade asset class.”
The Rise of Alternative Assets and Tech Giants
Perhaps the most significant trend of 2025 was the surge in investment in alternative commercial properties. Sectors outside the traditional five core types—such as data centers, medical offices, and student housing—attracted enormous capital.
The single largest transaction of the year was in the healthcare space. Remedy Medical Properties acquired a 296-property medical office portfolio from Welltower, setting a record for the largest-ever sale in the sector. This highlights a growing investor appetite for properties tied to non-discretionary services like healthcare.
Data is the New Bedrock
The insatiable demand for data processing and storage has turned data centers into a premier real estate asset class. In 2025's top 50 deals, transactions related to data infrastructure were prominent.
Tech giants were major players in this space. Amazon and Google were actively acquiring properties and land for data center development. A standout deal was SDC Capital Partners' purchase of 97 acres of entitled data center land in Leesburg, Virginia, for $615 million. The price, exceeding $6.3 million per acre, set a new record and underscores the immense value placed on data infrastructure.
Corporate Giants Go Shopping
The trend of corporate owner-occupiers buying their own real estate also accelerated, led by major technology firms. Apple, in particular, invested heavily, deploying over $1.1 billion in California's Santa Clara County alone. The company acquired several office buildings and a large research and development campus.
“By purchasing these assets, Apple is securing its long-term operational footprint while capitalizing on a 20-30% pricing reset in the Silicon Valley office market compared to 2022 peaks,” Fagan explained. Microsoft made similar strategic purchases throughout the year.
A Split in the Market by Deal Size
The recovery has not been uniform across all transaction sizes. The data shows a clear divide between the smallest and largest deals, with the middle market still facing financing hurdles.
- Small Deals (Under $5M): This segment, often favored by private capital and individual investors, is thriving. It is the only category to have surpassed its 2019 pre-pandemic pace, now standing 4% ahead.
- Large Deals (Over $100M): Representing institutional players and REITs, this segment saw a 23% increase in volume from 2024. However, it remains the furthest from a full recovery, at just half of its 2019 level.
- Mid-Sized Deals ($15M - $100M): This portion of the market continues to struggle the most, as these transactions are often the most sensitive to financing difficulties in a high-interest-rate environment.
Looking Ahead to 2026
The progress made in 2025 sets a cautiously optimistic tone for the year ahead. Market participants are hopeful for tailwinds from a more accommodating Federal Reserve and potential fiscal stimulus.
Private equity firms have emerged as significant players, deploying capital that was held back during the peak of rate hikes. This is creating a rebalancing, with some public REITs selling large portfolios to these private buyers.
However, experts do not anticipate a return to the explosive growth of the low-rate era. “With interest rates unlikely to drop precipitously, 2026 is expected to see a moderate acceleration of current momentum rather than a return to the era of ultra-cheap capital,” Fagan concluded. The market appears to be entering a new phase of slower, more deliberate growth built on a more stable foundation.
