Investment sales increased in May, but the arrival of more buyers to the commercial real estate market hasn’t boosted values.

Prices slipped modestly across all commercial property types and conditions in May, but top-quality assets are seeing valuations slide faster than their less-amenitized peers, according to CoStar’s May Commercial Repeat Sales Indices.

CoStar tracked 1,491 repeat commercial real estate property sales in May, up 1.2% from the prior month, the research giant announced Friday. The $130B in sales over the trailing 12-month period is 26.8% higher than the same period a year earlier, with investment-grade assets accounting for 57.4% of the increase in transaction volume.

But the value-weighted U.S. Composite Index, which is biased toward high-value trades in core markets, declined for the third consecutive month and was 21.2% off its all-time high of July 2022. Meanwhile, the equal-weighted index reflecting a broader subset of assets slipped just 0.6% month-over-month and has actually risen by 0.3% over the trailing 12 months.

The investment-grade subindex has been more volatile than other indexes, down 1.4% in May after a 6.4% decline in April. The index did jump 4.9% in March but is still 20% off its all-time high from June 2022.

Pricing for smaller assets, however, was at an all-time high after rising 2.6% over the 12 months ending in May.

Distressed property sales accounted for just 42 deals, or 2.8% of May's activity, despite the wall of debt that is slated to mature this year, decade-high delinquency rates on bank loans and a similar story in the public CMBS market.

Half of those distressed sales were for investment-grade assets, but troubled properties accounted for less than 10% of all investment-grade transactions.

Property values slid in May because of weak demand as landlords on aggregate lose more tenants than they can find, according to CoStar.

A combined 51M SF of office, retail and industrial space became newly vacant in the second quarter as the pace of negative absorption accelerated. Landlords are sitting on 84M SF more vacant space today than they had at the start of the year.

Despite an ongoing push from office and industrial users to move into the highest-quality properties, 59% of the space that has come back to the market vacant is in investment-grade assets.