The return of institutional investors juiced the U.S. commercial property market in July after five months of deal value declines.

The increase in commercial real estate prices seen in the CoStar Commercial Repeat-Sale Indices data was attributed in part to REITs, pension funds and large investment firms returning to the market after souring on it due to elevated borrowing costs over the last three years.

High-value trades common in core markets pushed CoStar’s value-weighted U.S. composite index to a 1.3% increase in July.

Despite the month-over-month increase, prices were still down a little more than 1% compared to July 2024, and the index is more than 21% behind its peak from three years ago. But the year-over-year decline was less than what the market saw in June, CoStar reported.

There were modest price increases among secondary and tertiary markets as the equal-weighted composite index increased 0.3% in July. That index’s prices rose nearly 1% year-over-year and are just under 2% behind their high from March.

While overall sales volume was down from June, the 1,482 transactions in July accounted for $10.7B worth of deals. That total was more than 4% down from June but over 9% higher than July 2024’s total. CoStar said the month-over-month decline was due to fewer small-dollar deals because individual investors continue to feel cautious toward the market.

The 12-month transaction total was $133B, which was a 27% year-over-year increase. That jump was thanks to investment-grade properties rising 33% during that time frame.

Distressed repeat sales declined to a little more than 3% of all transactions.

For the fifth straight month, the percentage of properties taken off the market before being sold increased. It nearly hit 27% in July as many property owners opted to wait for market conditions to improve.

“This may suggest that sellers believe prices will be higher in the future and are willing to wait to realize those potential gains,” said Chad Littell, CoStar’s national director of U.S. capital markets analysis.

The percentage of asking prices accepted by sellers remained steady in July compared to last year.

The overall U.S. investment sales market told a slightly better story during the first half of the year compared to the doldrums since the Federal Reserve started raising interest rates in 2022. Led by a surge in transactions in Dallas-Fort Worth, the market was up more than 25% by dollar value during the first six months of 2025.

Transaction volume also rose more than 15% over last year to nearly 12,500 sales, according to Avison Young’s first-half U.S. investment sales report.