- Green Street’s Commercial Property Price Index fell 0.1% in April, marking the first monthly decline this year, though values remain 3.1% higher than a year ago.
- Life sciences was the only major property sector to post a monthly move, declining 0.7% in April despite still gaining 5% year over year alongside strong performances from data centers and strip retail.
- Elevated Treasury yields and the Federal Reserve’s pause on rate cuts are keeping pricing pressure on commercial real estate, particularly in the office sector, where values remain down 35% from their 2022 peak.
Bisnow reports that commercial property prices cooled slightly in April as elevated borrowing costs and sluggish rent growth continued to limit investor enthusiasm. According to Green Street’s Commercial Property Price Index, CRE values slipped 0.1% during the month, ending a streak of modest gains earlier in 2026.
Even with the decline, the broader market has remained relatively resilient. The all-property index is still up 3.1% year over year, reflecting improving stability across several sectors despite ongoing capital market headwinds.
Treasury Yields Keep Pressure on Valuations
Green Street co-head of strategic research Peter Rothemund said buyers have stayed disciplined amid a challenging financing environment. In a statement, Rothemund pointed to uninspiring rent growth and a 10-year Treasury yield holding in the mid-4% range as key factors limiting upside for property prices.
The 10-year Treasury yield, a benchmark that heavily influences CRE borrowing costs, dipped below 4% in late February before climbing again after the escalation of the Iran conflict. Yields peaked at 4.4% on March 27, according to market data, and remained near 4.3% as of May 6.
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The Details
Life sciences was the only major property type to post a monthly pricing change in April, falling 0.7%, according to Green Street. Despite the monthly decline, the sector remains up 5% over the past 12 months.
Data centers and strip retail continue to lead CRE pricing performance, with values in both sectors rising 6% year over year. Meanwhile, broader industry pricing remains well below prior highs. Across all asset classes, values sit 15.5% below the market peak reached in 2022.
Office remains the weakest sector by a wide margin. Office property prices have dropped 35% from their 2022 peak, while self-storage values have fallen 22%, per Green Street’s May 2026 data.
A Divided Pricing Recovery
The uneven recovery underscores how capital continues flowing toward operationally resilient sectors while higher-rate-sensitive property types struggle to regain footing. Demand tied to AI infrastructure and cloud computing has continued supporting data center valuations, while grocery-anchored and necessity-based retail has held up better than discretionary retail formats.
At the same time, office landlords continue facing weak leasing demand and elevated refinancing pressure. According to CBRE’s 2026 US Outlook, office vacancy rates remain near record highs nationally, contributing to ongoing valuation declines. The pressure has intensified as bond market volatility pushed Treasury yields higher in recent weeks, further complicating refinancing and acquisition underwriting across CRE sectors.
Why It Matters
April’s pricing dip highlights how sensitive CRE valuations remain to interest rate expectations and geopolitical volatility. Investors entered 2026 expecting multiple Federal Reserve rate cuts, but sticky inflation and global instability have largely sidelined those expectations.
The Federal Open Market Committee left benchmark rates unchanged again on April 29, marking its third consecutive hold this year. Federal Reserve Chair Jerome Powell said during the Fed’s March press conference that policymakers still lacked clarity on how geopolitical tensions and broader economic disruptions would affect inflation and growth.
Higher Treasury yields directly impact cap rates, financing costs, and transaction underwriting, making it harder for buyers and sellers to align on pricing. That dynamic has contributed to slower deal activity across several property sectors in early 2026.
What’s Next
CRE pricing likely will remain rangebound unless borrowing costs ease materially. Green Street’s Rothemund said in April that the combination of elevated Treasury yields and delayed rate cuts would limit near-term price appreciation.
Investors will be watching upcoming inflation data and future Fed meetings closely for signs that monetary policy could loosen later in 2026. Until then, sectors with stronger fundamentals — particularly data centers, strip retail, and select life sciences assets — are expected to continue outperforming the broader commercial property market.
