Prices for commercial properties fell at the most rapid pace since 2010 in January, with prices of apartments sinking most sharply month-over-month, a new report shows.

The Real Capital Analytics CPPI National All-Property Index dropped 4.8% from a year ago and 2.7% from December, according to MSCI, which released the report.

If the pace were to continue all year, it would result in a 27.9% annual decline, the biggest since 2010.

The report largely blames interest rates for the price drops.

“A spike in mortgage costs in 2022 has thwarted deal activity in commercial property, pushing pricing lower,” it says.

Commercial real estate purchases totaled less than $20B in January. There have only been four weaker starts to a year since 2005, according to MSCI.

Apartment prices tumbled hardest, dropping 4.6% from a year earlier and 2.8% from December to January, according to the report.

As for office, properties in central business districts saw no pricing change from December to January but are down almost 1% year-over-year. Suburban office saw a 1.1% price decline in January over the previous month and a 0.5% drop over last year.

“Prices in the six major metros recorded the sharpest rate of decline since June 2010, falling 6.9% year-over-year,” the report says. “The index has posted monthly declines for eight months in a row. The non-major metro index dropped 2.0% from a year earlier and 1.8% from December.”

Retail also saw a minor drop, falling by 0.9% from December and 0.1% from January 2022, GlobeSt reported, citing the MSCI report.

That tracks with Green Street’s Commercial Property Price Index update from earlier this month, which found that the office, industrial, multifamily and retail sectors are all down 17% from their peak. The overall index now sits 14% below its March 2022 apex.

Apartment values also took the biggest hit in that report, dropping 20% in a year with a 1% fall in the last month, Bisnow previously reported.

But conditions shouldn’t get much worse, according to Green Street.

“While appraisals are likely headed lower, the real-time picture of property pricing shows a market where we’ve either reached bottom or are very close to it,” Peter Rothemund, co-head of strategic research at Green Street, said in a statement.

Industrial continued to be CRE’s darling, according to the MSCI numbers, which showed it to be the only sector to post annual growth in January. Industrial prices rose 6.4% from January 2022, but growth was down 0.3% from December. If that trend continued for the remainder of 2023, industrial prices would fall 3.2% annually, GlobeSt reported.