CRE sales reach $389B as office distress edges to 11.2%

U.S. commercial real estate investment sales reached $389 billion through the third quarter, and the $143 billion transacted in the three months to September was the strongest since 2022, according to Avison Young.

Multifamily led that volume and industrial grew fastest year over year, Avison Young's data show.

For fund selectors, core fund returns depend on sector weights: NCREIF's index gained 1.41%, seniors housing led, and office was the only major sector with a negative capital return.

CRED iQ counted $4.5 billion of CMBS debt flagged in October, and 93% was already past maturity or within six months of its due date. The firm's distress reading rose to 11.2%.

Blackstone Mortgage Trust posted a $327.6 million loss on office loans. Distributable earnings of 42 cents a share and a $1.95 per-share loss both beat expectations. Average investment size fell to $18 million.

Trepp flagged $1.11 billion of interest shortfalls across 77 SASB deals. Six of those deals hold $516 million of the total, and five have unpaid interest on their Class A bonds.

Weil Gotshal & Manges will vacate 447,000 square feet at the GM Building, 767 Fifth Avenue, leaving BXP with roughly a quarter of the tower to re-lease at $121 a square foot, below trophy Midtown rents.

MAA cut FFO guidance by 4 cents a share and reported a 0.4% decline in third-quarter revenue as Sun Belt rents lag. The Memphis apartment REIT expects marketing costs to ease in the second half of 2027.

Canyon's Feingold said lender extensions are ending and that forced bank action will widen the opportunistic window, while S3 Capital's Robert Schwartz pointed to construction-lending yields.