Commercial Property Prices Post First Back-to-Back Annual Gains Since 2022 Article originally posted on Globe St. on August 26, 2025 U.S. commercial property prices posted consecutive year-over-year gains in June and July, marking the first such two-month stretch since mid-2022, according to MSCI. The data suggests that sentiment across the sector may be shifting after several years of broad declines. MSCI’s RCA CPPI National All-Property Index rose 0.9% in July compared with the same month in 2024, and it increased 0.6% from June. That monthly improvement was enough to reflect an annualized growth pace of 7.7%, MSCI noted. Over three months, the index gained 1.2%. Despite recent momentum, prices remain down 11.2% over the past three years, though they show longer-term growth of 13.8% over five years and 44.3% over the past decade. Performance varied sharply by property type. The office sector recorded a 0.8% increase from June and a 2.3% rise from a year earlier. But over longer time frames, office prices showed steep declines, down 21.7% over three years and 8.2% over five years, before edging into positive territory with 7.8% growth over 10 years. Within that sector, central business district offices fared far worse than suburban ones. Those assets were down nearly 47% from three years ago, while suburban office properties declined 17.6% over the same period. Industrial assets remained the strongest performer. Prices rose 0.7% in July, 3.4% over the past year and 10.3% over three years. Over the longer term, the sector surged 46% in five years and more than doubled in a decade, making it the only property category to show gains over a three-year period. Retail properties posted modest gains, rising 0.3% month-over-month and 4.2% compared to a year earlier, though values were still down 5.4% over three years. Commercial property more broadly rose — 0.5% in July and 1.2% over 12 months, while multifamily housing values were flat on the month and only 0.4% higher than a year earlier. Multifamily has declined 19% over the past three years, despite stronger growth of 10.5% in five years and 66.7% in 10 years. The weak performance over three years reflects comparisons to the market’s post-pandemic highs, when valuations were buoyed before rising inflation and tighter monetary policy weighed down prices across nearly all property types, MSCI said. The firm added that investor outlook has shifted toward “cautious optimism” in the second half of 2025, as transaction volumes picked up in the first half of the year compared with 2024. A potential cut in interest rates by the Federal Reserve could further support a rebound.