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Commercial real estate deal volume fell in December for the second straight month, but the full-year numbers reveal some progress, potentially setting up much-needed momentum for this year.

Total deal dollar volume dropped 20% in December year over year, according to monthly data provided by Moody’s as a media exclusive to CNBC’s Property Play. It tracks the top 50 commercial real estate property sales across the U.S., in the core segments of multifamily, office, industrial, retail and hotel.

For all of 2025, deal volume was 17% higher compared with 2024, a healthy expansion but lower than the 24% annual growth seen the year before and still 30% below the 2019 pre-pandemic benchmark.

“The US commercial real estate (CRE) market in 2025 was defined by a steady, albeit decelerating, climb toward stabilization,” said Kevin Fagan, head of CRE capital market research at Moody’s. “The recovery proved resilient in the face of significant economic slowing, policy uncertainty, a massive loan maturity wall, and persistently high interest rates compared to three years ago.”

Leading the landscape were the multifamily and office sectors. The recovery in office has been swelling, as return-to-office orders and a boom in AI employment counter the pandemic-driven narrative that office is over.  

Total office deal volume was up 21% in 2025 compared with the year before. Investors, however, continue to favor Class A or trophy assets, as the rest of the market struggles.

Multifamily, which has been seeing declining fundamentals, such as occupancy and rent, still led 2025 dealmaking, up 24% in deal volume from 2024. It benefited from higher mortgage rates in the single-family for-sale market, which kept more renters from becoming buyers.   

Retail also saw a healthy gain of 19%. Fundamentals in the sector, especially grocery-anchored and necessity-based centers, were strong, fending off continued pressure from e-commerce.

“Retail has officially re-entered the conversation as a durable, investment grade asset class, with investors more focused on the usual underwriting nuances than potential functional obsolescence and a ‘retail apocalypse,’” said Fagan.

Last year also saw something of a comeback for much beleaguered bigger dollar CRE deals. The volume of sales over $100 million was 23% higher than in 2024, Moody’s found. These deals are reflective of institutional players, corporate owner-occupiers and some REITs. That segment is still, however, the furthest from recovery, at just half of 2019 levels. 

The smallest-scale deals, those below $5 million, are now actually moving ahead of their 2019 pace by 4%. They tend to be favored by private capital and individual investors who have been more active and liquid through this rate cycle.  Deals priced between $5 million and $15 million are just 12% below 2019 volume. 

The middle-sized deals, those between $15 million and $100 million are still struggling, as they are most vulnerable to difficulties in financing. 

Another leading trend in 2025 was the alternative play – sectors outside of the core five, like health care-related properties, data centers and student housing. The largest sale of 2025 was a 296-property medical office portfolio, bought by Remedy Medical Properties from Welltower. It was also the largest-ever sale in the sector.

The seemingly desperate need for data was also standout in 2025’s top 50 deals. Amazon and Google, in particular, were active. The ninth-largest sale of the year was a $615 million land deal in northern Virginia. SDC Capital Partners purchased 97 acres of entitled data center land in Leesburg from Chuck Kuhn’s JK Land Holdings, a record-setting deal exceeding $6.3 million per acre. 

Data also drove a surge in corporate owner-occupiers, particularly tech giants like Apple and Amazon. In fact, Apple went on something of a shopping spree, according to Fagan, deploying over $1.1 billion in California’s Santa Clara County alone, including several office buildings and an office and R&D campus. 

“By purchasing these assets, Apple is securing its long-term operational footprint while capitalizing on a 20-30% pricing reset in the Silicon Valley office market compared to 2022 peaks,” said Fagan, adding Microsoft made similar moves last year.

The gains of 2025 bode cautiously well for commercial real estate, which is seeing something of a portfolio rebalancing. While institutional investors definitely came back to the sector, some major public REITs sold large, multi-tenant portfolios to private equity firms. The latter are now proving to be big players, looking to deploy significant capital that was sitting on the sidelines in the recent higher-rate environment. 

“Market participants are largely optimistic, anticipating tailwinds from a more dovish Federal Reserve under an incoming chair and fiscal lifts from potential tax cuts,” Fagan said. “However, with interest rates unlikely to drop precipitously, 2026 is expected to see a moderate acceleration of current momentum rather than a return to the era of ultra-cheap capital.”