📢 Dollar volume reached ~$115B in Q2 2025, up 3.8% year over year, but the number of properties sold fell 7.4% to a decade-low pace. The market is bifurcated: portfolio and trophy transactions found capital; smaller one-off deals struggled with debt costs and risk pricing. Multifamily and selected office portfolios led the rebound in dollars, masking weak throughput elsewhere. Median $/SF rose broadly, reflecting quality bias and thin comp sets rather than a wholesale re-rating.

Loan Performance. Refinancing costs kept many owners from transacting, compressing deal count. Where maturities or balance-sheet objectives forced sales, sponsors packaged assets to clear with institutional equity and debt funds. Agency liquidity aided larger apartment portfolios; office trades that did print were either high-quality or driven by capital stack pressure, not a broad recovery in office credit. Resolution paths favored extensions and recapitalizations over auctions, keeping visible distress low in prints while preserving a backlog

Demand Dynamics. Buyers concentrated on scale, certainty of cash flow, and expense transparency. That skews comps toward higher-quality income streams and inflates medians. Mid-market tenants and short WALT assets faced a higher required yield, dampening bid depth. Geographic selectivity remained sharp: Boston, DC, LA, and Sunbelt coastal nodes saw better velocity; NYC/SF continued to face hybrid-work drag and policy friction, limiting depth despite isolated trophy demand.

Asset Strategies. Sellers with core and core-plus assets leaned into audit-ready financials, low capex needs, and bundled dispositions to match buyer mandates. Value-add listings cleared when business plans were de-risked with executed leases or TI/LC pre-funding. Smaller assets in secondary locations required price adjustments or creative structures (assumptions, seller carry) to offset leverage constraints and exit-liquidity risk. Portfolioing weaker offices improved buyer take-up relative to single-asset offerings.

Capital Markets. Capital formed a barbell. Private credit and institutional JVs funded large tickets; local banks remained tight for sub-$50M checks. Spreads narrowed modestly at the top end but stayed punitive for smaller sponsors, preserving the count drop. The result is a market where big deals print at firm pricing while the long tail waits for either cheaper debt or capitulation.

🛠 Operator’s Lens

Near term, expect a slow thaw in H2 2025 volumes with deal count only inching up as bid-ask spreads compress at the top end. Large portfolio sales in multifamily and industrial likely continue to dominate prints. A maturity-driven wave over the next 6–12 months could lift deal counts but test median pricing if more forced sellers hit. If rates ease in 2026, small-to-mid market liquidity should release; absent that, 2025–H1 2026 remains a barbell where scale wins and the tail waits.