Smaller commercial real estate deals are showing renewed momentum, even as overall activity lags behind the sector’s peak in 2022. According to Green Street, transactions between $5 million and $25 million totaled $45.24 billion in the first half of 2025—up 3.5% from $43.7 billion a year earlier.

Although still about 27% below the 2022 high of $62.26 billion, analysts note that activity is gradually picking back up. Much of the growth has come from multifamily, industrial, and retail properties, with select office assets also returning to the mix. While larger deals continue to drive the bulk of market volume, smaller transactions remain a vital segment of the industry.

Green Street’s data—compiled through internal research, broker networks, and transaction participants—tracks sales starting at $5 million. To provide additional perspective on sub-$25 million activity, the firm also incorporates property records, broker surveys, press releases, and other public sources.

By property type, the first half of 2025 saw multifamily account for 26% of small-cap sales, followed by industrial (24%), retail (21%), office (18%), hotels (8%), and niche categories such as self-storage and data centers (3%). These shares are largely in line with trends seen in recent years.

Financing has been a key factor in sustaining deal flow. Regional banks have increased their lending activity, including select office properties that are well-positioned and cash-flow strong. Other capital sources—such as CMBS, debt funds, and government-sponsored enterprises—have also expanded their presence. For some investors, higher interest rates have enhanced the appeal of debt yields in this segment.

On the buyer side, private investors—including family offices, syndicators, and high-net-worth individuals—continue to dominate the sub-$25 million market. However, more international players are beginning to target smaller assets, seeking stable fundamentals and opportunities created by revaluations.

Source: GlobeSt.