Mergers and other portfolio deals buoyed an otherwise sluggish May for commercial real estate sales, new data from MSCI shows.

Transaction volume totaled $42B in May, up 15% from the same period a year earlier and boosted by $6.8B worth of M&A, while single-asset deal flow slipped 4%. The weakness in individual assets also reared up in April, when CRE sales volume was down for the first time in nearly a year, and has set the stage for second-quarter totals to come in below expectations.

The slowdown is a reversal from the 27% increase in transaction volume tracked across the first quarter, and the macroeconomic impacts of the U.S. war with Iran are at least partly to blame, JPMorgan Chase analysts wrote in a note to investors Wednesday.

“It is hard not to overlook the correlation here between the move in interest rates at the start of the Iran war and the typical timeline of 2-4 months to process a CRE sale, from marketing, to bid gathering and awards, to due diligence and closing,” the analysts wrote. “To us, the evidence here is that there was a pause in the market.”

Pricing momentum is nonetheless positive, with the RCA CPPI U.S. National All-Property Index climbing 1.6% from a year ago in May, the strongest pace since prices started growing again in February. The modest gains were enough to bring some buyers back into the market, MSCI analysts wrote.

Still, June sales would need to total $42.2B to meet last year’s second-quarter totals, a “difficult hurdle to clear,” according to the analysts.

Financing for transactions is readily available, and JPMorgan has tracked growing momentum in M&A talks, suggesting that, after the recent lull, “there could just as well be a snap-back of deals in the coming quarters, barring additional macro events,” the analysts wrote.

Portfolio deals were up 205% in May compared to the prior year, offsetting the 41% decline in office sales and 46% decline in development site deals. Senior housing, apartment and industrial sales volumes were all also up by at least 30% in May.

Yields on 10-year U.S. Treasury bonds in May crossed the 4.5% threshold that has long been cited as a ceiling to refinance older-vintage debt, and yields remained above 4.5% for roughly a week. There is lingering fear that elevated rates will “again choke off deal activity,” although a 4.5% 10-year hasn’t historically held back deal flow, the MSCI analysts wrote.

The average cap rate for transactions ticked up 5 basis points from April to 6.6%, with a 7.2% average cap rate for office trades, up 1 basis point; 6.8% for industrial, a 26-basis-point upswing; and 5.8% for apartments, up 3 basis points.