Commercial property prices have dropped nearly 13% so far from their most recent peak earlier this year, according to the Green Street Commercial Property Price Index in October, with prices down 7.3% during October alone.

The index peaked in May 2022 after climbing out of a pandemic-related crash in 2020, and has been dropping ever since.

Shopping mall prices have been hit the hardest since the recent peak, down 23%, Green Street reports. Industrial, a recent darling property type among investors, has dropped 17% since then, making it the second-worst-performing property type.

Apartments, offices, strip centers and healthcare assets have all suffered double-digit drops as well. Hospitality, however, did relatively well, with its prices down only 6% since the most recent peak, Green Street noted. Self-storage was likewise down only 6%.

Green Street said the cause of the declines was straightforward: rising interest rates.

"Higher yields on Treasury bonds equals higher cap rates,” Green Street co-Head of Strategic Research Peter Rothemund said in a statement.

The Federal Reserve hiked the key federal funds rate by 75 basis points on Wednesday — the sixth rate increase in 2022 — to between 3.75% and 4%, and Fed Chairman Jerome Powell said that the central bank's efforts to put a lid on inflation via higher rates probably isn't over yet.

The impact of higher rates on CRE prices isn't over yet, either.

As long as the 10-year Treasury note stays above 4%, Rothemund said, property prices are likely to keep dropping.

Futures market data suggests that investors expect another 0.75% rate hike in December, followed by two further increases of 0.5% each in early 2023, Forbes reports.