U.S. commercial real estate prices climbed in February, marking the eighth increase in nine months, as high-value properties drive a recovery from pandemic disruption and widen the performance gap over smaller assets.
This divergence, according to the latest CoStar Commercial Repeat Sale Indices, signals that the top of the market is healing while momentum at the lower end cools. The monthly report tracks properties that have sold more than once, a methodology known as a repeat sale.
The value-weighted U.S. Composite Index, which reflects pricing trends among large properties, extended a streak of gains that began in mid-2025 and increased 1.7% in the past 12 months. That outpaced the 1.3% annual gain posted by the equal-weighted index, an indicator that skews toward more inexpensive properties.
The split between high-value and lower-priced assets offers the clearest signal yet that commercial real estate's long-awaited recovery is real — but uneven. Since COVID-19 broke out in 2020, the industry has been looking for evidence of a return to pre-pandemic norms.
Now, according to the CoStar indices, institutional investors appear to be reentering the market at the upper end, while smaller and secondary-market assets continue to appreciate, though at a slower pace.
"The February data point to a market taking deliberate steps forward," said Chad Littell, national director of U.S. capital markets analytics for CoStar and author of the report. "Prices are no longer falling. But a broad-based resurgence, one that lifts all property types and market tiers equally and simultaneously, is not what we're seeing. For now, properties offering durable and appreciating contractual income at a discount to peak pricing are finding favor."
Market stabilization
Littell noted there's volatility across the market: "Prices rise one month and flatten or dip the next, reflecting a market that is stabilizing rather than surging," he said.
That choppiness is visible in the equal-weighted index's two subindices that track the low and high ends of the market separately. Both reflect a recovery increasingly concentrated at the top.
Large, well-located properties anchored by long-term tenants and with strong cash flows are attracting buyers first, a trend that has defined the post-pandemic correction period stretching from 2023 through today.
The equal-weighted investment-grade subindex rose 1.5% in February to 233, the sharpest monthly gain among all tracked segments. The general commercial subindex, which skews toward lower-value transactions, fell 0.3%. That is its second decline in three months and the only negative monthly reading among the headline indices.
Looking ahead, Littell said refinancing remains a "pressure point" for property owners, depending on what they own and the timing of their acquisition. High interest rates, empty space and a limited ability to raise rents are limiting the pace of recovery, he said.
CoStar's CCRSI data draws on 1,266 repeat-sale pairs recorded in February and a database of 341,897 transactions since 1996, giving the indices broad statistical weight.