Commercial Real Estate Deal Growth Stalls: What Slowing Momentum Means for 2026
Commercial real estate investors hit the brakes this October, marking the first year‑over‑year decline in deal volume since early 2024. After nearly two years of strong momentum, the market’s sudden hesitation has thrown a spotlight on widening pricing gaps, elevated financing costs, and the ongoing standoff between CRE buyers and sellers.
According to Mortgage Professional America, the slowdown doesn’t signal a collapse—rather, it underscores how far pricing expectations have drifted apart in today’s high‑rate environment. Kevin Fagan, head of CRE capital market research at Moody’s, described October’s numbers as a sign of an extended stalemate rather than an impending downturn.
Deal Volume Still Active, but Momentum Slows
Despite the cooling pace, October still delivered $24.4 billion in U.S. CRE sales—roughly 70% of the volume seen in October 2019. Total 2025 deal activity remains above 2024 levels. But as Moody’s data shared with CNBC reveals, the rapid growth seen in late 2024 and early 2025 has lost steam.
Multifamily took the sharpest hit, with a steep 27% drop in October deal volume. Yet, many multifamily assets still trade at premiums—showing that while demand is strong, pricing has become more tangled and competitive.
Hospitality Surges as Conversions Reshape the Market
The hospitality sector emerged as the only segment with a year‑over‑year increase, rising approximately 6%. A standout transaction was the sale of the New York Edition hotel from Abu Dhabi Investment Authority to Kam Sang Company for $231.2 million.
Kevin Fagan highlights a broader trend: struggling office buildings transforming into valuable hotel or residential conversions. Iconic projects such as the Woolworth Building illustrate how adaptive reuse continues to redefine the CRE landscape.
Meanwhile, value‑seeking buyers made headlines when New York Life acquired a Manhattan office tower for nearly half its 2015 valuation. Institutional investors are circling distressed but well‑located assets—hinting that prime office space still offers long‑term promise.
Commercial Mortgages: A Volatile but Active Landscape
The third quarter of 2025 brought a powerful resurgence in mortgage originations. According to the Mortgage Bankers Association, commercial and multifamily lending jumped 36% year‑over‑year.
Even more surprising: office lending surged 181%. Despite the sector’s challenges, lenders are selectively backing properties with conversion potential or those supported by medical and life‑science tenants—two fields rapidly absorbing obsolete office inventory.
What This Means for 2026
This slowdown suggests 2026 will be shaped not only by fundamentals like rent growth and occupancy, but by how quickly market participants recalibrate expectations in a higher‑cost environment.
For commercial originators, investors, brokers, and analysts, this means strengthening market literacy—particularly around evolving debt markets, valuation resets, and underwriting shifts. And professionals entering or upskilling in real estate, mortgage, or finance will need sharper insights and stronger training than ever.
This is where institutions like Cameron Academy play a crucial role. With licensing education, continuing education, and professional development across real estate, mortgage, insurance, and financial services, Cameron Academy helps future‑focused professionals stay competitive, confident, and opportunity‑ready.
As the market transitions into its next cycle, knowledge isn’t just power—it’s deal flow, resilience, and long‑term career growth.
More Articles
Getting licensed or staying ahead in your career can be a journey—but it doesn’t have to be overwhelming. Grab your favorite coffee or tea, take a moment to relax, and browse through our articles. Whether you’re just starting out or renewing your expertise, we’ve got tips, insights, and advice to keep you moving forward. Here’s to your success—one sip and one step at a time!
The recent settlement agreements between Anywhere Real Estate and RE/MAX have brought significant changes to the real estate industry. These agreements mark a turning point in buyer broker compensation and have far-reaching implications for agents and brokers alike. With the removal of the National Association of Realtors (NAR) membership requirement and the Code of Ethics, agents now have more flexibility in conducting their business. This shift has sparked both optimism and concerns within the industry. Join us as we navigate through the changes brought about by these settlement agreements and uncover their potential effects on professionalism, competition, and the overall landscape of the real estate market.
The mortgage market is currently facing significant challenges, with mortgage rates nearing 8%, low housing inventory, and rising home prices. In this article, we explore the strategies employed by wholesale lenders and brokers to navigate these conditions and adapt to the changing market landscape. One key strategy is the implementation of down-payment assistance programs, providing financial support to potential homebuyers. Another is the option to buy down mortgage rates, offering more affordable monthly payments. With limited housing inventory, many potential homebuyers are turning to fixer-upper properties, and lenders are capitalizing on this trend by offering renovation loans. Brokerage firm owners are also diligently managing their cost structures to remain profitable. Looking ahead, industry professionals are closely monitoring the potential impact of the Federal Reserve's tightening monetary policy and political instability on the mortgage market.
Two innovative startups in Texas, Hive3D and Icon, are leveraging 3D printing technology to combat housing inventory shortages and climate change. They're constructing eco-friendly homes, offering a groundbreaking approach to sustainable housing. Houston-based Hive3D uses "green cement," reducing waste and contributing positively to the environment. Icon's efficient construction methods enable them to construct an entire subdivision of homes in less time, meeting the growing demand for housing and reducing resource consumption. These 3D-printed homes are more cost-effective due to reduced labor costs and minimized material waste, offering more affordable housing options.
In the midst of the continued climb of 30-year fixed mortgage rates, the Mortgage Bankers Association (MBA) has issued a call to the Federal Reserve (Fed) to bring much-needed certainty to the financial markets. The MBA believes that the Fed must make clear statements regarding the end of its rate hikes and its intentions with its mortgage-backed securities (MBS) holdings. The MBA, represented by its president and CEO, Bob Broeksmit, has emphasized the urgency of the Fed's communication. Broeksmit asserts that the Fed needs to clearly state that it has reached the end of its rate hikes and that it will refrain from selling its MBS holdings until the housing finance market stabilizes and mortgage-to-Treasury spreads normalize.
Despite a decline in mortgage application fraud, New York and Florida continue to face the highest mortgage fraud risks in the nation. The primary drivers of fraud risk in these states are fraudulent income misrepresentation and undisclosed real estate liabilities. High-risk metropolitan areas include New York City, Miami, Tampa, and Orlando. To combat mortgage fraud risks, it is crucial to maintain vigilance and take proactive actions. Stay ahead of the game and protect yourself from mortgage fraud risks in New York and Florida. Sign up for our mortgage fraud prevention course today.
Significant changes may be on the horizon for the United States housing market if new legislation is passed. Bills introduced in both the U.S. Senate and the House of Representatives propose the requirement of title insurance on mortgages purchased by government-sponsored enterprises (GSEs). Known collectively as The Protecting America's Property Rights Act, these bills are currently under consideration and have not yet been voted on. If passed, the proposed amendments to the charters of Fannie Mae and Freddie Mac would make primary-lien title insurance mandatory for conventional mortgages on one- to four-unit properties. Title insurance plays a critical role in the mortgage industry by protecting lenders and homeowners. It offers financial loss protection in the event of property title defects, ensuring that property ownership is free from any legal disputes or claims. Lawmakers aim to enhance the integrity of the mortgage market and provide additional safeguards for lenders and borrowers by requiring title insurance on GSE-backed loans.
