After months of cautious optimism, commercial real estate prices are showing clear signs of recovery, with high-value transactions leading gains in February, according to CoStar.
The increase marks the eighth consecutive month of growth since mid-2025, signaling continued progress in the sector’s post-pandemic rebound.
CoStar’s analysis is based on two key indexes derived from 20 years of repeat-sales data, offering insight into how property values are shifting across different markets. February’s findings reflect 1,266 repeat-sale pairs drawn from a broader dataset of more than 340,000 transactions dating back to 1996.
The equal-weighted index, which emphasizes smaller deals common in secondary and tertiary markets, rose 1.3% in February. In contrast, the value-weighted index—more influenced by large institutional investments—climbed 1.7%. The gap between the two suggests a recovery that remains uneven, with high-end assets gaining momentum faster than smaller properties.
“The February data point to a market taking deliberate steps forward,” said Chad Littell, CoStar’s national director of U.S. capital markets analytics.
While prices have stabilized, Littell emphasized that the recovery is not broad-based. Instead, investor demand is concentrating on assets that offer stable, growing income streams and are still priced below prior market peaks.
Within the equal-weighted index, performance varied by segment. The investment-grade subindex recorded a 1.5% increase—the strongest monthly gain—while the general commercial subindex declined 0.3%, marking the only segment to post a loss.
Longer-term trends highlight the uneven nature of the rebound. The value-weighted index experienced a sharp decline between September 2022 and June 2025 and, despite recent gains, remains 16.6% below its previous peak as of February 2026. Meanwhile, the equal-weighted index has risen 6.8% over the same period, reflecting more consistent performance among lower-priced assets.
Challenges persist, however. Littell noted that refinancing remains a key pressure point for property owners facing higher interest rates, increasing vacancies, and limited rent growth—factors that continue to temper the pace of recovery.
Source: GlobeSt.
