Rising interest rates, low rent growth, and banking turmoil have dramatically slowed CRE investment volume. Commercial real estate investment decreased by 57% YOY in Q1. As a result, commercial prices have declined by 15% Year-over-Year as of May. Large players with cash on hand, however, have enjoyed the luxury of continuing to invest via all-cash transactions. Players of all sizes, meanwhile, continue to invest in select markets.

Multifamily continues to benefit from strong fundaments and a housing shortage, but is down from peak 2021 growth. Industrial Is past peak performance, but remains strong. Office demand remains low amidst ongoing headwinds. Other markets are experiencing a flight to quality as investors vie for Class A properties. Multifamily saw rent growth increase by 2.5% over one year, the lowest growth levels since early 2021. Office saw even lower growth at 0.9%, as demand remains low and vacancies reached new highs. Industrial rent growth continued to outperform, reaching 10.3%, while warehouses reached 11.7%. Retail saw 3.8% rent growth over the last 12 months. Rents from strip centers rose at 4.5%, the second highest pace within the retail sector, falling only behind neighborhood centers.

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