The commercial real estate market’s uneven recovery has taken another turn, as transaction growth dipped into negative territory for the first time since early 2024, according to data provided exclusively to CNBC by Moody’s. The October pullback marks a pause in what had been a steady return of capital markets activity following years of turbulence tied to shifting interest rate policy.
The Moody’s data, which tracks the top 50 property sales across the U.S., shows total sales of $24.4 billion for October—about 70% of the volume seen in the same month of 2019. While the total dollar value of deals in 2025 remains above last year’s level, the pace of growth has slowed sharply, reflecting stubborn financing costs and lingering macroeconomic uncertainty.
Kevin Fagan, head of CRE capital market research at Moody’s, told CNBC that the contraction in October deal growth stems less from a downturn than from stalemate conditions between buyers and sellers.
“The bottom of the U-shaped recovery from 2023 low volumes has been lengthened by persistently high interest rates and policy and economic uncertainty of 2025,” Fagan noted.
Even with the slowdown, transaction activity remains widespread across property types. Industrial and multifamily continued to lead deal counts among the top 50 sales, while the hotel sector was the only segment to post year-over-year growth—rising 6% after a weaker third quarter.
One notable transaction was the $231.2 million sale of the New York Edition hotel at 5 Madison Avenue. The Abu Dhabi Investment Authority, which owned the property through its sovereign wealth fund, sold it to California-based Kam Sang Company.
Fagan pointed to the deal’s significance, not only for its high valuation but also for what it represents as a Middle Eastern investor’s retreat from New York City’s hospitality market. The building—originally the MetLife Clock Tower—has a long history of adaptation, having been converted from an office building into a hotel in the last decade, much like the Woolworth Building’s transition to residential use.
Fagan observed that while these landmark buildings no longer hold substantial office value, they have proven highly viable in their new uses.
Multifamily properties saw the sharpest pullback in October, with sales volume down 27% from 2024. The drop followed several months in which multifamily deals had exceeded pre-pandemic levels. Despite the slowdown, many apartment assets continued trading at a premium to prior prices, underscoring buyer demand for income stability amid rate volatility.
Office assets remained a focal point for investors looking for discount opportunities or adaptive reuse potential. The largest sale of the month was the transfer of Sotheby’s global headquarters to Weill Cornell, a deal that could lead to the site’s conversion to medical or healthcare use, according to Fagan. In another notable transaction, New York Life purchased a distressed Manhattan office building from BGO at nearly half its 2015 sale price.
“These transactions show institutional interest returning to certain office assets where pricing has corrected,” Fagan said. “It reinforces the long-term value floor for well-located offices and the enduring utility of those buildings, even at a time of change.”
While signs of momentum loss have returned to the CRE market, Moody’s sees the current environment more as a reflection of recalibration than retreat—an industry adjusting to prolonged high rates and uncertain policy signals rather than one facing renewed distress.
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