U.S. commercial property valuations dropped again last month, but the fall may soon be coming to an end.

Green Street's Commercial Property Price Index decreased by 3% in November, the firm reported this week. The index is down 10% year-over-year and 22% from its March 2022 peak.

Green Street co-Head of Strategic Research Peter Rothemund said the rise in bond yields in September and October slowed real estate deals, but that has begun to change.

“The good news is that bonds have staged an epic rally since, and commercial property is now fairly priced vs. corporate bonds,” Rothemund said in a statement. “Property pricing may well have hit bottom.”

However, it may take time for pricing to experience upward momentum, as some economists believe interest rates won't begin to decrease until late 2024 at the earliest. This means that sales activity and valuations could take even longer to increase.

Breaking down Green Street's index, the core sector — which consists of apartment, industrial, office and retail assets — was down 25% from March 2022.

Office has faced the sharpest drop, a 35% decline from the peak and a 25% decrease from the same month last year. Multifamily assets followed closely with a 30% decrease from the peak and a 12% year-over-year drop.

The index also tracks healthcare, malls, lodging, manufactured home parks, self-storage and strip retail properties.