The office sector led commercial real estate property types in price gains over the past year, reversing a decline from 2024 despite broad market headwinds.
Value-weighted office property prices, which are more heavily influenced by higher-priced deals in major markets, rose 3.8% in the 12 months ended December, according to CoStar's Commercial Repeat Sale Indices (CCRSI). That is a stark contrast to 2024, when office prices in the category fell 11.4%.
"The office sector's 3.8% year-over-year price gain signals renewed investor confidence in larger, prime-market developments despite widespread concerns about remote work and occupancy rates," said Chad Littell, national director of U.S. capital markets analytics for CoStar and author of the report.
Other property types also performed favorably on the value-weighted index, though with smaller gains. Multifamily assets rose 0.7% annually, rebounding from a 2.3% decline in 2024. Industrial and retail property prices each climbed 0.4%, smaller increases than the prior year's gains of 4.1% and 2.6%, respectively.
By contrast, the equal-weighted index, which reflects the more numerous but lower-priced sales typical in secondary markets, showed modest declines for office and retail in 2025. Industrial and multifamily prices offset those losses, with the overall index posting a 0.3% annual gain. Littell noted that the divergence between value-weighted and equal-weighted indices points to a flight to quality, as institutional investors favor core assets in major markets.
Regional trends were mixed in the fourth quarter and over the full year. In the South, the value-weighted index rose 1.8% in Q4 and 3.1% annually, with office prices climbing 4.7%, multifamily rising 2.2% and industrial increasing 0.9%, while retail slipped 1.7%. The Midwest saw a strong annual performance, with the value-weighted index advancing 7.4%. Multifamily led the gains at 7.5%, followed by industrial at 4.5% and office at 3.2%, while retail fell 2.9%.
In the Northeast, the value-weighted index fell 2.7% over the year despite a 1.5% increase in the fourth quarter. Multifamily prices rose 1.1%, but office declined 3.1%, retail fell 2.4% and industrial contracted 2.1%.
The West posted the weakest annual performance, with the index down 5.8% despite a 1.7% Q4 gain. Multifamily dropped 4.7%, office fell 3.2%, industrial declined 2% and retail edged up 0.1%.
The CCRSI report analyzed 19,576 repeat-sale pairs in 2025 and 338,467 repeat sales since 1996.
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