Commercial real estate investment sales opened the year with their strongest quarterly showing in three years, signaling that more capital is beginning to move back into the market after a prolonged period of hesitation.
According to first-quarter industry reports, U.S. CRE sales totaled $112.6 billion during the three months ending in March, an 18% increase from the same period last year. Transaction volume also improved, with roughly 6,800 deals completed, up 7.71% from the first quarter of 2025.
Pricing metrics showed some signs of stabilization. The average cap rate slipped five basis points to 6.44%, suggesting that buyers and sellers may be finding more common ground after several years of rate-driven uncertainty.
The results have been characterized as evidence that the investment market is beginning to regain traction, noting that well-capitalized buyers may have an advantage in the current environment, particularly before broader competition fully returns.
Based on historical trends and predictive modeling, sales volume for the remaining three quarters of the year have been estimated to reach approximately $497 billion. That would put total 2026 investment sales in the range of $585 billion to $590 billion.
That forecast, however, depends on a key assumption: two federal funds rate cuts by the Federal Reserve. That outcome remains uncertain. While many investors have been hoping for lower borrowing costs, some Fed officials have warned that additional rate increases are still possible. At the same time, early-year optimism among banks about CRE lending appeared to soften by April.
Among the 15 major growth markets tracked in the report, New York Metro led the country with $8.70 billion in sales across 494 transactions. Los Angeles followed with $7.59 billion, while the San Francisco Bay Area recorded $6.15 billion. Dallas-Fort Worth, Washington, D.C., South Florida, Chicago, Atlanta and Houston also posted multibillion-dollar quarterly totals.
South Florida remained one of the stronger markets nationally, registering $4.28 billion in investment sales across 244 transactions.
Performance varied significantly by asset class.
Office posted one of the sharpest percentage gains, with sales rising 38.6% to $20.5 billion across 1,159 deals. The sector’s average cap rate declined 35 basis points to 7.35%, suggesting that some investors may be selectively returning to office assets, particularly those with stronger fundamentals or pricing resets.
Industrial remained highly active, with $31.1 billion in sales, up 27.3% year over year. Deal count increased to 2,124 transactions, while the average cap rate rose 34 basis points to 6.70%. E-commerce continues to support demand, though trade policy uncertainty remains a concern.
Multifamily sales were largely flat by dollar volume, increasing just 0.5% to $32.1 billion. The sector still led all major property types by total sales volume, but cap rates rose 31 basis points to 6.03%. Elevated supply in some markets continues to weigh on performance, while affordability challenges in the for-sale housing market continue to support rental demand.
Retail sales totaled $17.8 billion, up 2.8%, though transaction count declined 9.27%. Average cap rates fell 12 basis points to 6.85%. Consumer confidence remains a challenge, but centers anchored by strong credit tenants continue to attract investor interest.
Development-related sales saw the largest annual gain, climbing 55% to $11.1 billion, even as the number of transactions declined 8.11%. Financing constraints remain a major obstacle for new projects, but data center demand continues to provide a powerful growth driver.
Source: GlobeSt.