CRE Investment Rises Sharply In Q3

CRE investment reached $111.7B in Q3, rising 15% year-over-year and extending a six-quarter growth streak.
Office and retail led growth, with office sales up 38% and retail volume climbing 24%, driven by urban markets and shopping center activity.
Multifamily and industrial remained dominant, accounting for the highest overall transaction volumes at $43.8B and $26.5B, respectively.
Hospitality lagged, posting a 15% drop in volume and standing out as the only major sector to contract.

Key Takeaways

Q3 Sees CRE Investment Gain Ground

The US commercial real estate market saw a notable increase in investment activity in the third quarter, reports GlobeSt. Total volume climbed to $111.7B, according to Colliers. The increase reflects growing investor confidence and a steady recovery across most asset classes, even as larger, institutional deals remain selective.

Office Deals Reignite Investor Interest

Office properties saw renewed activity in Q3, with volume climbing 38% compared to last year. Investment was particularly strong in major downtown areas, where larger transactions and international capital returned to the market. Manhattan stood out with $7.1B in trades—nearly double the volume from the same period in 2024. Other top-performing metros included Dallas, San Jose, Los Angeles, and Houston. Overall, office pricing moved up over 7% annually.

Retail Investment Sees New Life

Retail real estate posted its strongest quarter in some time, with volume up 24% year-over-year to $16.3B. Nearly half of this activity came from shopping center acquisitions. The sector also led all property types in pricing gains, with values increasing 5.5%. Los Angeles topped retail investment, followed by Manhattan and Dallas, while markets like Seattle and Portland reached record levels.

Multifamily And Industrial Stay On Top

Multifamily remained the most heavily traded property type, with $43.8B in sales—a 13% rise over the prior year. Dallas led the pack with $6.7B, while San Jose notched record volume through Q3. Despite strong demand, prices edged down just under 1%.

Industrial assets attracted $26.5B in investment, an 8% increase. The sector’s growth came primarily from individual asset sales, which were up 25%, as portfolio deals remained sluggish. Dallas again led activity, with several secondary markets like Nashville and Fort Lauderdale also hitting new highs.

Hospitality Lags Behind

In contrast to other sectors, hospitality saw a drop in investment, falling 15% year-over-year to $5.8B. Most of the pullback came from a sharp decline in portfolio transactions, while single-property sales were only slightly lower. Pricing still trended upward, rising nearly 4%, especially in non-major metro areas. Manhattan and Phoenix led sales volume in the sector.

Looking Ahead

While large-scale transactions are still the exception, steady interest in single-asset deals is keeping capital flowing. Colliers notes that falling Treasury yields could further stimulate deal activity into the fourth quarter, setting the stage for a stronger close to 2025.