Commercial real estate prices moved in different directions in January, with smaller properties posting gains as investment-grade assets extended their slide.
This divergence, according to CoStar’s Commercial Repeat-Sale Indices, reveals a market dynamic playing out across the U.S. property landscape: Lower-priced assets that populate secondary and tertiary markets are outperforming high-value, big-city properties that dominate headlines and institutional portfolios.
The trend is highlighted in the monthly indices that track when previously sold properties trade again in a process called a repeat sale. CoStar follows secondary-market deals in an equal-weighted index, while premier, more expensive assets show up in a value-weighted index.
“The January report marks the fourth consecutive month that CoStar’s equal-weighted and value-weighted composite indices moved in diverging directions,” said Chad Littell, national director of U.S. capital markets analytics for CoStar and the report’s author.
Financial markets are generally anticipating between one and three Federal Reserve interest rate cuts in 2026. That expectation has increased the optimism that more developers and investors will come off the sidelines and boost deal activity.
“Professional investors have been in a wait-and-watch stance, and we are now seeing a combination of inflection points such as a floor in pricing,” Littell said.
Trailing 12-month sales for all U.S. commercial property deals were up 20% in January on an annual basis to $146.8 billion, Littell said.
‘Recent anomaly’
CoStar’s equal-weighted index rose 1.3% in January from the prior month. It gained 1.1% annually. The value-weighted index reflecting prices of premier properties fell 0.4% in January and is up just 0.8% year over year — less than half the annual gain reported by the equal-weighted index.
“I think January was the recent anomaly and we’ll see value-weighted return to recent outperformance again in the first half of this year,” Littell said.
The value-weighted measure now stands 17% below its all-time high set in July 2022.
CCRSI tracks various liquidity measures monthly including the number of transactions, the level of distressed sales, time on market and price-to-asking ratios.
January recorded 1,298 repeat sales, generating $9.2 billion — a 10.4% decline from January 2025. Repeat-sale transactions fell by 143 deals compared with the same month a year earlier.
The average time on the market fell to 174 days in the 12 months ended in January, down from 175 days in the same period a year earlier.
However, the modest improvement in time-to-close came with trade-offs.
The price-to-asking ratio declined to 92.5% in January, compared with 93% a year earlier — meaning buyers secured slightly larger discounts off asking prices. The seller withdrawal rate rose slightly to 27.1% from 26%.