Commercial real estate dealmaking has slowed again, with November marking the second straight month of year-over-year declines as higher-for-longer interest rates and investor caution weighed on transactions.
According to data Moody’s provided to CNBC’s Property Play, CRE transaction volume dropped 10% from the prior year, totaling roughly 1,800 deals across multifamily, office, industrial, retail and hotel sectors.
After October recorded the first annual decline in deal volume since the post-Fed rate hike recovery began in early 2024, November’s downturn deepened the slowdown. Kevin Fagan, head of CRE capital market research at Moody’s, told CNBC the pullback was more than a continuation of that trend— with deal activity falling below levels seen in November 2020, during the first year of the pandemic.
“This stems from the combination of higher-for-longer interest rates, policy uncertainty, a tenuous labor market, and caution on the part of CRE lenders and investors,” Fagan said.
Even so, he noted that market liquidity remains selectively open, operating at about two-thirds of pre-pandemic volume and concentrated in larger-scale transactions.
Investor appetite has shifted toward big-ticket properties. Moody’s data showed that deals exceeding $100 million were up 51% year-over-year, lifting the average deal size to $14.2 million—the highest since early 2019. Yet smaller transactions dropped “markedly” in the same period. Multifamily assets led the month’s top property sales with 20 major transactions, followed by 11 in office and eight in industrial.
Office sales reflected a more efficient price-discovery process, Fagan added, often involving purchases of buildings for “mission-critical” uses, conversions or steep discounts. One example: Axonic Capital’s acquisition of 114 West 41st Street in Manhattan from Clarion Partners, at roughly 53% below its previous sale price.
Beyond Moody’s core dataset, the largest deal of the month came from the sale of a $7.2 billion medical office portfolio spanning 296 properties in 34 states. The seller, Welltower, has been repositioning its investments toward senior housing.
Separate data from Coldwell Banker Commercial’s 2026 Outlook Report suggested that strong buyer interest continues to face obstacles. Deals are stalling amid high rates, tariffs and construction costs, with many sellers reluctant to cut prices.
“What we are seeing broadly aligns with Moody’s data,” Mitch Ginsberg, CEO of CommLoan, told GlobeSt.com.
“Deal activity is beginning to pick up, but it remains uneven and highly selective. Even with rates stabilizing, many deals still struggle to close because financing assumptions are too narrow or based on expectations of future rate cuts.”
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