**U.S. CRE Pricing Continues Trend of Mild Annual Declines**
U.S. commercial real estate prices continued their downward trajectory in May 2025, extending a pattern of modest annual declines over the past year. According to MSCI Real Assets, the RCA CPPI National All-Property Index fell 1.0% year-over-year. On a month-over-month basis, prices slipped 0.2% from April, reflecting an accelerated annualized decline of 2.8%. This marks the fifth consecutive monthly decrease in the index.
“In the face of mounting macroeconomic uncertainty, commercial property prices have maintained stability so far,” said MSCI Real Assets in their report. They noted that early 2025 tariff announcements from the U.S. administration have yet to significantly impact pricing — a lag attributed to the longer transaction timelines typical of the commercial property market.
Performance among the four major property sectors was mixed. Retail emerged as the strongest performer with a 4.0% year-over-year price increase. However, its modest 0.2% gain in May suggests a slowing annualized growth rate of 1.9%.
The industrial sector is nearing its first negative year-over-year pricing growth since July 2023. Meanwhile, apartment prices fell 1.1% year-over-year in May, showing a slower rate of decline compared to the steeper losses recorded over the previous two and a half years.
Central business district (CBD) office properties remained the weakest sector, recording a 6.2% year-over-year drop. While still notable, this reflects an improvement compared to the nearly 30% annual decline observed in the same period a year earlier.
