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!
Fort Myers Beach is becoming the front line of a new Florida—one shaped by hurricane devastation, soaring insurance premiums, and rapid gentrification. Three years after Hurricane Ian, residents are still battling massive rebuilding costs and insurance bills that now exceed $5,700 a year on average, with flood insurance reaching $10,000 for some families. Long-time locals, small businesses, and service workers are being priced out as wealthy investors move in, transforming once-affordable coastal communities. Real estate professionals warn that foreclosures may rise if economic pressures continue, signaling a pivotal moment for Florida’s housing market and the professionals who serve it.
Economic uncertainty, AI disruption, slowing population growth, and rising portfolio risk are reshaping commercial real estate heading into 2026. A new report unveiled at NAR NXT highlights the forces that will reward informed professionals — and challenge those who aren’t prepared. From fiscal policy and shifting capital flows to tech transformation and housing shortages, the landscape is evolving fast. Cameron Academy breaks down the key issues so real estate, mortgage, finance, and insurance professionals can stay ahead of the curve.
A sudden federal shutdown of FEMA’s BRIC resiliency program has left cities and commercial property owners scrambling, exposing billions in real estate to rising climate threats. With nearly a billion dollars in mitigation funding clawed back and extreme weather intensifying, insurance premiums are expected to surge and coverage may shrink — placing new pressure on markets like Florida and New York.
A new Florida Senate bill aims to stop cities and counties from blocking residential developments over vague “compatibility” concerns. Supporters say the measure would speed up homebuilding and ease housing shortages, while opponents argue it strips communities of essential oversight and could accelerate growth without proper planning. The proposal could reshape development timelines and land-use decisions statewide, making it a major issue for real estate professionals to watch.
Cape Coral–Fort Myers has officially moved into buyer-friendly territory, with homes now sitting a median 119 days on the market—far longer than both the Florida and U.S. averages. Rising inventory, a 36.9 percent price‑reduction rate, and slower absorption compared to accumulated supply are giving buyers more leverage and time to negotiate, signaling a meaningful reset in this once‑fast‑moving Florida market.
Kansas City’s commercial real estate sector is finally turning a corner after several years of sluggish activity. Retail is leading the rebound, while multifamily and industrial properties are gaining traction as pricing stabilizes and buyer confidence returns. A standout 2025 transaction—the sale of the 380‑unit Cyan Southcreek community—signals that capital is flowing back into the market. With bid‑ask spreads tightening and investor optimism rising, Kansas City is entering a period of renewed opportunity for real estate professionals and investors alike.
Florida’s Middle Class Is Being Squeezed Out: Insurance Costs, Rebuilding Struggles, and a Changing Coastline Gallery
