Macro-Transaction | Volume & Pricing Summary

Key Highlights

Market Liquidity and Growth Rebound

U.S. commercial property sales climbed significantly in 2025, with transaction volume reaching $545.3 billion. This represented a 23% year-over-year increase, a higher level than 2024, suggesting ongoing improvements in market liquidity. Even when taking out significant one-off data center transactions, investment volume still grew by 19% due to rebounding deal activity across every major sector.

 

Rise of Individual Assets

Individual asset sales have become a dominant portion of the market, accounting for 77% of all activity in 2025. This is a notable shift from the 2005–2022 average, where portfolio and entity-level deals held a larger 31% share. As interest rates remain structurally higher, future performance is expected to be driven by property-level fundamentals and asset selection rather than broad top-down allocation.

 

Pricing Stabilization and Cap Rate Normalization

Overall pricing improved in 2025, with the RCA CPPI All-Property Index edging up 0.2% year-over-year. While cap rates have climbed from the record lows of 2022, most sectors have now reached levels considered historically normal. The office sector remains an exception, with cap rates for both CBD and suburban properties currently sitting higher than their 25-year average.

 

CRE Market Watch

Rising Liquidity vs. Structural Distress

CRE capital markets are gearing up for a busier 2026. Private-label CRE securitization volume is forecast to reach $183 billion this year, marking a post-Global Financial Crisis high and an 18% increase over 2025. This surge is driven by moderating borrowing costs, liquid capital markets, and sustained investor demand. Single-borrower transactions are expected to lead the market, accounting for more than half of total issuance.

 

Maturity Wall Drives Elevated Distress

Despite robust issuance, loan distress is expected to remain elevated through 2026 as $525 billion in loans reach maturity. The loan distress rate, which includes 30+ day delinquencies and current but specially serviced loans, climbed to 10.9% in late 2025, up significantly from 6.7% at the end of 2023. While higher issuance volume may help moderate the rate of distress by growing the denominator, the absolute dollar volume of troubled loans is expected to rise further before flattening out later in the year.

 

CMBS Distress Forecast to Reach 15% by Year-End 2026

The CMBS distress rate is forecast to reach between 14.5% and 15.0% by December 2026 as borrowers face a hostile refinancing environment. This surge follows a massive 148% increase in distress over the past 43 months, rising from 4.83% in mid-2022 to nearly 12% in early 2026. Special servicers are adopting an increasingly aggressive posture as foreclosure now dominates workout strategies at 39.1%, while collaborative loan modifications have slowed to just 20.3%. With note sales accounting for nearly 19% of resolutions, servicers are prioritizing risk transfer to distressed debt investors over prolonged asset workouts.

 

Sector Hotspots: Office and Industrial Shifts

Office Concentration

The office sector remains the primary driver of distress, with a distress rate of 17.4% as of late 2025. Trepp reports that 345 office loans totaling $13.72 billion are due to mature in 2026, with over $2 billion of that total carrying a debt service coverage ratio of 1.09x or less, making them high-risk for refinancing.

 

Industrial Weakening

While the overall CMBS delinquency rate dipped slightly to 7.7% in December 2025, distress began to tick up in previously resilient sectors like industrial.

 

Retail Resilience

Retail continues to benefit from limited new supply and steady sales growth, though mall properties remain a pocket of high stress with an 11.2% delinquency rate.

 

REO and Modification Trends

U.S. banks have proactively managed borrower stress by increasing loan modifications, which surged 66% year-over-year as of mid-2025. While total Real Estate Owned balances remain a fraction of GFC-era peaks ($4.1 billion vs. $51 billion), the higher-for-longer interest rate environment is forcing a shift in lender strategy. Lenders are increasingly selling standalone notes off their books to redeploy capital into higher-yielding loans, creating new opportunities for Main Street private capital buyers to acquire middle-market debt at a discount.