CRE Pricing Spread Between Cycle's 'Winners And Laggards' The Widest Ever
The pricing chasm between property types that are on the rise and those that are struggling is the widest it has ever been.
Industrial pricing in Q1 2026 was up 88.5% since the quarter before the pandemic. Office pricing was up just 36.6% over the same stretch, according to a June report from Altus Group.
"That is not a recovery gap, it is a structural repricing," Altus Group wrote.
CRE, in general, saw price gains in the first quarter despite factors that were expected to throttle them. The Federal Reserve voted unanimously on Wednesday to leave the benchmark rate unchanged, and that is a condition that many Fed governors anticipated would hold steady for the rest of the year, likely taking interest rate cuts off the table for now.
The war in the Middle East, which drove oil prices sky-high, and the tech-stock sell-off and the potential double-edged sword that artificial intelligence poses for office owners were factors that Altus anticipated would be most significant to property owners, but they haven't played out as expected yet.
"The two macro stories that should matter most to property, a tech-tenant scare that hits office demand and an oil shock that lifts the cost of capital (or at least keeps it elevated), did not show up in the Q1 numbers," the report's authors wrote. "They may show up later, and we'll be watching, but they were not in the Q1 data."
All property types except hospitality were trading at new highs in Q1, Altus Group found.
Industrial, despite its price growth, remains the cheapest property type on a per-square-foot basis, with a median price of $110 per SF in the first quarter. Multifamily, at $150 per SF, is the most expensive. Office was trading at a median of $137 per SF, retail at $142 per SF and hospitality at $138 per SF, according to Altus Group.
Price growth for all property types was up 1.4% quarter-over-quarter and up 8.7% annually. Retail and industrial led the way with increases of 10.4% and 11.8%, respectively, Altus Group said.
The median transaction price across all property types in the first quarter of 2026 was a record $129 per SF. Prices have more than doubled in the 16 years since the 2009 low of $56 per SF, Altus Group said.
