A version of this article first appeared in the CNBC Property Play newsletter with Diana Orrick. Property Play covers new and evolving opportunities for real estate investors, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large publicly traded companies. Sign up to receive future editions directly to your inbox.
The recovery in commercial real estate has been slow and uneven, as has interest rate policy over the past few years. Of course, there is a deep connection between the two.
Despite gaining significant momentum from overcoming the pandemic, this year has been a tough one. October was the first month of negative year-over-year volume growth since the post-Fed rate hike recovery began in early 2024, according to monthly data provided by Moody’s exclusively for CNBC’s Property Play. Tracks the top 50 commercial real estate (CRE) real estate sales across the United States.
Volume growth turned positive early last year and even approached pre-COVID-19 levels by the end of the year.
“Rather than an impending downturn in CRE capital markets, the slide into negative growth in October 2025 reflects an ongoing impasse between buyers and sellers,” said Kevin Fagan, head of CRE capital markets research at Moody’s. “The bottom of the U-shaped recovery from low volumes in 2023 has been extended by continued high interest rates and policy and economic uncertainty in 2025.”
However, October was still an active month. Sales were $24.4 billion, approximately 70% of October 2019 sales. Although the total dollar amount is still higher this year than last year, the growth momentum has slowed significantly from 2023 onwards.
Looking at specific real estate trends, industrial and multifamily led the top 50 deals. The only sector that saw an increase in volumes compared to last year was hotels. Although the third quarter was negative, it recorded growth of 6%.
One notable sale: The New York Edition Hotel at 5 Madison Avenue was sold by sovereign wealth fund Abu Dhabi Investment Authority to real estate developer Kam San Company for $231.2 million.
“The New York Edition Hotel is an interesting hotel because of the very high sale price, the withdrawal of Middle Eastern sovereign wealth funds from New York City, and the history of the building,” Fagan said, noting that it was originally an office building called the MetLife Clock Tower and was the tallest building in the world for about three years from 1910 to 1913.
MetLife Clock Tower and Pedestrian Bridge, Madison Avenue, New York.
Educational Images | Universal Images Group | Getty Images
The Clock Tower, once the world’s tallest building, and the Woolworths building have been converted into a hotel and residences respectively since 2013.
“It has little value as an office, but it has great value as a hotel and an apartment building, respectively,” Fagan added.
On the other hand, the multifamily housing sector saw the biggest rebound in October, with a decline of 27% compared to 2024. The previous four months had seen sales volumes above pre-COVID-19 levels, and despite the rebound, buildings were mostly trading at a premium to their previous sales values.
Office continued its difficult recovery, partly due to discounts and real estate conversions.
Mr. Fagan said the top sale in October was the sale of Sotheby’s headquarters to Weill Cornell & Co., which likely means its conversion into health care or clinics.
New York Life has acquired a dilapidated Manhattan office building from BGO for nearly half the price of its last sale in 2015.
“This shows that there is institutional interest in offices selling at discounted prices, strengthens the floor on the long-term value of office buildings in good markets, and recognizes the enduring utility of such properties,” Fagan said.
