Commercial real estate pricing has finally started to move again—and this time, it's not a broad rally so much as a retail-led push dragging the rest of the market along for the ride. Green Street's latest Commercial Property Price Index shows values ticking higher in recent months, with the all‑property index up 1.6% in May alone, but the real action is in a handful of consumer-facing and specialty sectors that are doing most of the heavy lifting.
Retail Steps Into The Spotlight
In the most recent reading, strip centers and malls were the standouts, with pricing jumping noticeably over the past month while much of the rest of the market posted more modest gains. Strip retail values climbed 3.8% in May, while mall prices surged 5%, putting both sectors among the strongest one‑month movers in the index.
The move is a reminder that, for all the talk about e-commerce and changing shopping patterns, well-located retail can still command a bid when fundamentals line up. Investors appear willing to lean into grocery-anchored strips and better-quality malls that show solid tenant sales, manageable supply pipelines and some rent growth and the latest monthly data suggest that appetite is now showing up in pricing.
That's a very different story from the one told a couple of years ago, when retail was struggling to convince anyone it could grow its way out of secular headwinds. The latest numbers from Green Street suggest the narrative has shifted—at least for top-tier assets—and the price action in the past few months, particularly May's outsized gains in strip retail and malls, reflects that shift more clearly than a full-year lookback would.
Office Finds A Little Traction
Office, on the other hand, is finally starting to show a pulse, but the context matters. Prices nudged higher in the most recent month, with Green Street's index showing a 1.5% gain for office in May, a welcome change after a long run of declines that left values deeply discounted from their 2022 highs. Those gains are coming off a low base, and they're highly selective: buyers are tiptoeing back into the space for well-leased, high-quality buildings in good locations, not across the board.
The gap between current values and the peak is still wide enough to make any talk of "recovery" feel premature. Instead, what the last few months show is more of a tentative floor—enough price stability to get some deals done, but not enough to erase the damage of the past few years. For lenders and owners, that matters. A few months of firming valuations, including May's modest 1.5% bump, can ease pressure around refinancings and dispositions, even if nobody believes we're racing back to previous pricing levels.
A Market Pulled In Different Directions
Outside retail and office, the recent pattern has been one of steady, if unspectacular, gains in sectors tied to durable themes—think logistics, digital infrastructure and various forms of "necessity" housing. Industrial continues to benefit from demand for distribution and warehouse space, with prices rising 1.2% in May even as the pace of growth has cooled from its earlier surge. Data centers and manufactured home parks are also eking out incremental gains, with data center values up 2% and manufactured home parks up 1.8% in the latest month, reflecting both structural demand and a lack of easy supply.
Apartments and several other income-oriented sectors, by contrast, are still working through earlier repricing. Recent months have brought some stabilization, but the reset from peak values remains significant: in May, apartment pricing was flat and sectors like net lease and self‑storage posted only slight gains of 0.2% and 0.6%, respectively.
With Treasury yields having marched higher over the past three months, cap-rate compression is no longer doing much of the work; instead, investors are leaning on net operating income growth to justify paying up, which shows up in the pattern of small but positive monthly moves in sectors where fundamentals feel more durable.
Taken together, Green Street's latest data describe a market that's grinding forward rather than snapping back. The near-term story isn't about a synchronized rebound—it's about a narrow group of sectors, led by retail and supported by a few niche property types such as industrial, data centers and manufactured home parks, pulling overall pricing higher just enough to matter.
Whether that continues will depend heavily on where borrowing costs settle over the next few months and how much patience capital has for a recovery that's still more patchwork than broad-based.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.