Retail properties emerged as one of the brightest spots in Altus Group’s latest quarterly review of commercial real estate, bucking the broader trend of declining deal counts with solid gains in dollar transaction volume. According to the company’s CRE Exchange podcast, retail sector sales jumped by 18% year-over-year and 10% quarter-over-quarter, driven by widespread price increases across 13 out of 15 subsectors.
Automotive posted particularly strong gains, with price increases of 25.4% quarter-to-quarter. Bars and restaurants saw prices soar by 42.2%, while storage advanced by 27.3%, according to Cole Perry, Altus associate director of research. Only hospitality lagged, posting more restrained gains with limited-service hotels up 8.1% and full-service hotels rising 4.9%.
Multifamily and office continued to lead overall commercial real estate performance, with respective dollar volumes up 39.5% and 11.8%. However, property counts for both sectors fell, down 9.2% and 5.2% quarter-over-quarter, which Altus analysts attribute to a shift in focus toward larger assets. Altus adjusts its national aggregates each quarter using “typical data infill,” a correction meant to capture underlying market shifts similar to economists’ seasonal adjustments.
Geographic differences were pronounced. Among the ten largest U.S. metropolitan areas, seven experienced annual declines in industrial pricing, with Phoenix dropping 37%, while three metros registered increases — Philadelphia led with growth of 54%. Office performance reversed the pattern: seven major metros saw gains, three declined, with Atlanta up 4% and Houston down 31%. Miami was the lone standout, posting increases across all four major sectors, while Houston and Los Angeles faced declines in each category, although LA's industrial market remained nearly flat. Miami’s retail sector commanded the highest price per square foot at $374, while Houston’s industrial sector remained the least expensive at $57 per square foot.
Altus also highlighted trends among individual property deals. Multifamily buildings saw a median size of 9,000 square feet, with deal value rising 20% quarterly and 25% year-over-year to $1.7 million. Industrial properties held steady at about 15,100 square feet, as deal sizes increased by 7% quarter-over-quarter and 12% year-over-year, also to $1.7 million. The median office building size reached 11,000 square feet, up 7% from Q1, and deal value rose 30% to $1.75 million. For hospitality, shrinking median building sizes and declining deal values were notable, with the median property at $3.9 million as they took both a 9% quarterly and annual decrease in size.
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