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Key Takeaways
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August CRE sales volume reached $107B, including $70B of M&A-type transactions, according to MSCI.
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Excluding M&A, sales fell about 21% from a year earlier even as total volume jumped 127% on megadeals.
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Multifamily volume rose 402% on the AvalonBay-Equity Residential merger, while most other property sectors posted declines.
Bisnow reports that August CRE transaction totals looked much stronger than the underlying single-asset market. MSCI’s August commercial property sales analysis put total volume at $107B. Roughly $70B came from M&A-type sales. Megadeals pushed overall volume up 127% year-over-year. Sales excluding M&A, however, fell about 21%. That gap shows a much more measured pace for individual property trades.
Megadeals Drive the Headline Number
August set a monthly record for M&A deal volume, according to MSCI. The largest contributor was the merger of AvalonBay Communities and Equity Residential. The combination created Vivmark Residential with an enterprise value around $70B. That single transaction lifted multifamily sales volume by 402% from a year earlier. M&A had already boosted July activity. BlackRock’s $33.7B acquisition of Aligned Data Centers helped total July sales reach $74.4B.
The Details
Performance across property types was mixed. Industrial sales increased 14% year-over-year to $11.5B. Senior housing rose 8%. Every other major asset class declined. Data centers recorded no asset trades in August. Hotel sales fell 45%. Office, retail, hotel, and development-site volumes all trailed the prior year. Prices were nearly flat. The RCA CPPI US National All-Property Index rose only 0.1% year-over-year. The average cap rate across August transactions was 6.01%, down 80 basis points from July.
Why It Matters
The M&A surge makes the market look more liquid than single-asset activity alone would suggest. Year-to-date sales volume is up 53% at $483B. A 221% increase in portfolio and entity-level deals drove much of that growth. Single-asset volume is up a more modest 12% through August. That gap echoes the slowdown in individual CRE transactions beneath headline megadeals. JPMorgan analysts said the late-quarter rise in rates had little time to disrupt deals already in motion. Elevated borrowing costs are instead slowing decisions as investors reset return requirements.