CRE Market Update: Commercial Property Prices Post Largest Annual Gain Since 2022

Commercial real estate finally received a welcome dose of positive news in October. After two interest rate cuts by the Federal Reserve, property prices climbed across every major asset class, marking the strongest annual growth since 2022 — and signaling momentum that many investors have been waiting for.

According to MSCI Real Capital Analytics, prices rose 4.2% year-over-year and 0.8% month-over-month, making October the fourth consecutive month of appreciation. It’s the first meaningful recovery trend since pricing began softening in late 2021.

While optimism was cautious earlier this year, the prolonged federal government shutdown made things worse, disrupting access to essential economic data and contributing to a 22% decline in deal volume. Even so, the latest MSCI report shows that investors are becoming increasingly willing to pay for quality assets, even as overall transaction counts remain lower.

🔧 Industrial Leads the Market — Again

Industrial real estate continues to outperform every other major sector:

+5% year-over-year price growth
+0.5% month-over-month
105% price growth over the past decade

Industrial has now logged monthly gains since May 2023, driven by resilient demand, strong rent fundamentals, and the continued absorption of post-pandemic oversupply.

CBRE reports the national industrial vacancy rate at 6.6%, showing signs of plateauing — a healthy indicator as supply and demand stabilize.

🛍️ Retail Shows Strong Stability

Retail pricing is also rebounding, with 4.7% year-over-year growth. Years of suppressed retail construction have created a supply pinch, keeping the national vacancy rate around 5%, according to CBRE.

Investors are gravitating toward essential retail, well-located neighborhood centers, and service-oriented tenants — categories that have proven durable even through recent economic uncertainty.

🏢 Multifamily Rebounds, But Still Lags Year-Over-Year

Apartment pricing rose for the third straight month but remains the only major property type still down year-over-year.

Key dynamics:

Record-breaking apartment deliveries in 2023–2024 are finally slowing
Q3 rent growth was slightly negative, per Newmark
Some multifamily owners seeking to refinance or sell have instead been forced to liquidate in today’s tougher lending environment

Still, the recent three-month rebound hints that the worst of the pricing correction may be behind us.

⭐ What This Means for Investors and Tenants

Confidence is returning, especially in industrial and retail
Lower interest rates are beginning to unlock capital that’s been sitting on the sidelines
Pricing momentum is back, even with slower overall transaction activity
For tenants, this stabilization offers greater clarity on lease negotiations and future occupancy costs
For investors, the next six months may offer strategic entry opportunities before pricing accelerates further

📌 Final Thought

After nearly three years of pricing volatility, October’s data marks a meaningful shift: CRE is stabilizing, and investor confidence is rebuilding. Industrial and retail continue to lead the charge, while multifamily shows early signs of recovery. With interest rates easing and demand normalizing, the path ahead looks more constructive than it has in years.

If you’d like individualized insight on how these trends impact industrial acquisitions, site selection, or tenant negotiations in the Atlanta metro area, I’m here as a resource.