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The recovery in commercial real estate has been slow and bumpy, much like interest rate policy over the past few years. The two, of course, are deeply connected.

After gaining significant momentum coming out of the pandemic, this year has been rough. October was the first month of negative year-over-year transaction volume growth since the post-Fed rate hike recovery began in early 2024, according to monthly data provided by Moody’s as a media exclusive to CNBC’s Property Play. It tracks the top 50 commercial real estate, or CRE, property sales across the U.S.

Deal volume growth turned positive in the early part of last year and was even approaching pre-Covid levels by year-end.

“More than an imminent downturn in the CRE capital markets, the slip to negative growth in October 2025 reflects the stalemate going on between buyers and sellers,” said Kevin Fagan, head of CRE capital market research at Moody’s. “The bottom of the U-shaped recovery from 2023 low volumes has been lengthened by persistently high interest rates and policy and economic uncertainty of 2025.”

But October was still an active month. There were $24.4 billion of sales, which is roughly 70% of October 2019 sales. Total dollar volume is still higher this year than it was last year, but the momentum of growth has slowed significantly since 2023.

Looking at specific property trends, industrial and multifamily led the top 50 deals. The only sector to improve in deal volume compared with last year was hotel. It saw 6% growth after a negative third quarter.

One notable sale: The New York Edition hotel at 5 Madison Avenue was sold for $231.2 million by the Abu Dhabi Investment Authority, a sovereign wealth fund, to the Kam Sang Company, a real estate development firm.

“The New York Edition hotel is an interesting one because of both the sales price being so high, a Mideast sovereign wealth fund pulling out of NYC, and the history of the building,” said Fagan, noting that it was originally an office building called the MetLife Clock Tower and was the tallest building in the world for roughly three years from 1910 to 1913.

Both the Clock Tower and the Woolworth building, which was also once the tallest in the world, were converted to hotel and residential, respectively, starting around 2013.

“They are nearly worthless as offices, but extremely valuable as a hotel and an apartment building, respectively,” Fagan added.

Meanwhile the multifamily segment saw the biggest pullback in October, down 27% from 2024. It had been showing volumes that were higher than pre-Covid levels in the four months before, and, despite the pullback, buildings were mostly trading at a premium to previous sales.

Office continued its rocky recovery, with either discounts or property conversions as part of the story.

The top October sale was of the Sotheby’s headquarters to Weill Cornell, which probably means a repurposing to health care or medical office, according to Fagan.

New York Life picked up a distressed Manhattan office building from BGO for almost half of its last sale price in 2015.

“It shows there is institutional interest in offices sold at discounts, reinforcing the long-term value floor for office buildings in good markets, and the recognized enduring utility of such properties,” Fagan said.