Momentum across U.S. capital markets strengthened through the end of 2025, as improving liquidity, steady pricing and active debt markets sustained a continued rebound in transaction activity. While policy uncertainty and elevated interest rates remain part of the backdrop, investors and lenders operated with greater conviction, signaling growing confidence in market fundamentals.
Recovery remains selective rather than broad-based. Smaller and mid-sized transactions continue to drive liquidity, while larger deals gradually re-enter the market as cap rates stabilize and financing conditions improve. Higher refinancing activity reflects both opportunity and pressure, as borrowers contend with record debt maturities and a capital stack that continues to evolve as 2026 unfolds.
Key Takeaways:
- Investment sales rose 20% year-over-year in 2025, with activity still concentrated in deals under $100 million.
- CRE debt origination increased 43% year-over-year, exceeding pre-pandemic levels and driven by refinancing.
- Cap rates stabilized across most sectors, with modest expansion in office and industrial.
- $547 billion in loans maturing between 2025 and 2027 are potentially troubled, led by office and multifamily.
- Institutional investment increased 23% year-over-year, while private capital and owner-users gained share.
- Returns improved across all major sectors, notably in office, where the majority of markets posted positive total returns.
