Pricing Shows Recovery Is Taking Shape Sector By Sector Article originally posted on Globe St. on August 7, 2026 Commercial real estate pricing is no longer moving in one direction. Property values are rising again, but Green Street’s latest data makes clear that the recovery is being led by a relatively narrow group of sectors rather than a broad return to the market conditions that prevailed before interest rates reset. Green Street’s Commercial Property Price Index rose 1% in July and 5.2% over the past 12 months. Yet the all-property index remains 13.4% below its 2022 peak, underscoring how much of the sector’s repricing has yet to be reversed. The story is less one of a universal CRE rebound than a widening separation between property types with durable demand and those still working through structural or cyclical pressure. July Gains Were Concentrated The July increase was driven by a small number of sectors. Mall values rose 4.2% during the month, industrial values increased 3.4% and lodging gained 2.2%. The other major categories tracked by Green Street, including apartments, office, strip retail, data centers, health care, manufactured home parks, net lease, self-storage and student housing, were unchanged for the month. That concentration matters. A positive headline number can suggest a market-wide acceleration, but the sector-level data points to selective repricing. Investors appear willing to assign higher values where property-level performance and tenant demand have held up, while maintaining more caution in sectors where operating fundamentals or financing conditions remain more uncertain. The July results also show how quickly sector weights can shape the aggregate index. Retail accounts for 20% of Green Street’s all-property measure, split evenly between malls and strip retail, while industrial accounts for 12.5%. A sharp monthly move in malls and industrial can therefore lift the broader index even when most other sectors are flat. Retail And Industrial Set The Pace Malls posted the strongest 12-month increase of any sector in the report, up 12%, and are now 3% above their 2022 peak. Strip retail was up 9% over the past year and sits only 2% below its prior high. Industrial values gained 7% over the year and are 8% below peak levels. Those numbers reinforce a theme that has become increasingly important for owners, lenders and capital allocators: real estate’s recovery will not be defined by a single macro call. It will be defined by asset selection, tenant demand, lease structure and the degree to which a property type can protect income. For retail, the data suggests investors are giving more credit to the durability of well-located centers than they did during the rate-driven downturn. For industrial, the sector’s 3.4% July gain indicates that capital-market pricing may be catching up with comparatively resilient occupier fundamentals. Neither result means pricing pressure has disappeared, but both point to renewed willingness among investors to underwrite growth and stability in selected assets. Office Remains The Deepest Discount Office remains the clearest counterpoint to the improving index. Values were unchanged in July but rose 5% over the past 12 months. Even after that increase, the asset class remains 34% below its 2022 peak, the largest peak-to-trough decline among the sectors Green Street tracks. That gap shows why a modest annual recovery should not be confused with a full reset. A 5% gain off a sharply reduced base still leaves office facing a long path back to its prior valuation level. The sector’s challenge is not simply the cost of capital. It is also the uncertainty surrounding future space demand, lease rollover and the large capital requirements needed to make older buildings competitive. The contrast with malls is especially notable. Mall values have moved above their 2022 peak, while office remains more than one-third below its own. For CRE executives, that divergence is a reminder that conventional labels such as “core” and “noncore” may be less useful than a detailed assessment of a property’s operating outlook and future capital needs. Rates Will Limit The Next Phase Green Street attributes part of the past year’s 5% appreciation to rental-income growth of roughly 2% to 3%, with lower cap rates for select property types accounting for the balance. But Peter Rothemund, the firm’s co-head of strategic research, said he does not expect further cap-rate declines, citing elevated interest rates as a continuing headwind. That view frames the likely next stage of the recovery. If cap-rate compression is no longer available to support values, future appreciation will need to come more directly from net operating income growth, improving leasing conditions or increasingly targeted demand for specific property types. That is a more demanding formula than a broad market rally powered by falling rates. The sectors furthest below peak remain telling. Self-storage is down 22% from its 2022 high, apartments are down 19%, net lease is down 18%, and health care is down 11%. Even data centers, despite their central role in the AI and digital-infrastructure investment narrative, remain 7% below peak in Green Street’s index. The market, in other words, is recovering—but it is doing so on a sector-by-sector basis. For owners and investors, the central question is no longer whether commercial real estate values are rising. It is whether a particular asset has the income growth, demand profile and capital structure to participate in the recovery.