The U.S. commercial real estate (CRE) market is showing unexpected strength, with second-quarter deal volume climbing nearly 18% year-over-year — a sharper rebound than analysts at JPMorgan had forecast.
CRE sales reached $38 billion in June, down 15.7% compared to last year. However, when excluding nearly $887 million in entity-level deals such as REIT and private company acquisitions, property transactions actually grew by 6% from a year earlier. Second-quarter sales as a whole totaled almost $110 billion, driven by major gains in retail (up 37.4%), industrial (up 15%), and office (up 11.5%).
Analysts point to stabilizing valuations and improving fundamentals as likely drivers behind the surge. With foreign exchange trends working in their favor, brokerage firms are also expected to post stronger-than-anticipated earnings this quarter. JPMorgan suggests June’s final tally could even climb another 30% once revisions are complete.
Investor sentiment is also being fueled by a sharp decline in new construction, creating a potential supply-demand imbalance. Industry experts suggest this could lead to an uncommon buying opportunity as long-term capital seeks resilient, income-generating assets.
That said, not all property sectors are seeing growth. Apartment and hotel transactions both dropped more than 45% year-over-year in June, even as overall cap rates declined by an average of 25 basis points to 6.5%. Central business district offices, however, are making a surprising comeback. Cushman & Wakefield data shows CBD office sales jumped 28% year-over-year in the first quarter, reflecting renewed investor interest in well-located Class A properties despite ongoing hybrid work pressures.
Looking ahead, constrained new supply and a gradual rise in return-to-office trends may further boost demand. For now, commercial real estate is reemerging as one of the few asset classes offering investors stability, income potential, and long-term relative value.
🔗 https://www.bisnow.com/national/news/capital-markets/us-cre-sales-gain-momentum-in-q2-130281
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