U.S. commercial real estate prices across all asset classes rose 4.2% year-over-year in October 2025, marking the largest annual increase since 2022, according to the MSCI Real Capital Analytics Commercial Property Price Index. Monthly growth also continued, with prices up 0.8% from September, representing the fourth consecutive month of gains. Analysts point to investor confidence following recent Federal Reserve interest rate cuts as a key driver, according to BisNow.
Industrial Leads the Market
Industrial properties were the strongest performers, with prices climbing nearly 5% over the past year and 0.5% month-over-month. Prices in the sector have grown consistently since May 2023 and have more than doubled over the past decade. Industrial vacancy remains moderate at 6.6% in the third quarter, as post-pandemic oversupply is gradually absorbed.
Retail and Apartment Trends
Retail property prices increased 4.7% year-over-year, supported by strong demand and historically low construction levels. Retail vacancy remains around 5%, keeping upward pressure on pricing.
Apartment prices rose for the third consecutive month after nearly three years of decline, although they remain below year-ago levels. Multifamily rent growth was slightly negative in the third quarter, and some landlords facing refinancing or sales challenges have had to liquidate holdings due to the weak market.
Dealmaking Slows Despite Price Growth
Despite rising property values, transaction volume fell sharply earlier in the year, including a 22% drop month-over-month amid federal data access disruptions.
October’s growth indicates that investors are willing to pay higher prices for properties even as the number of deals remains constrained, signaling selective but strong market demand.
