Third-quarter deal flow exceeded expectations as investment sales and debt origination both shot up.

September sales volume of $42B was a more than 19% increase over last year, MSCI Real Assets' latest U.S. Capital Trends report showed. That helped push the third quarter beyond JPMorgan’s previous forecast, according to the bank’s U.S. CRE transaction report released Wednesday.

Based on the latest figures from MSCI, JPMorgan analysts calculated U.S. transaction volume will increase more than 16% year-over-year to nearly $124B during Q3. For comparison, the firm’s analysts predict around an 18% year-over-year global capital markets revenue growth for the companies it covers.

“This is a very positive picture going into the earnings prints, in our view, when considering revisions to come,” JPM analysts wrote.

Those figures don’t take into account future revisions that could push the quarter’s numbers higher. Historically, finalized figures have been 30% above initial numbers, including July’s transaction volume being revised up 33.5% from its initial estimate.

The firm’s analysts forecast Q3 transactions will land around $140B, using a 30% increase from August’s and September’s initial figures.

That total would represent a 31% year-over-year increase, which is well beyond JPMorgan’s revenue growth forecast.

“Capital markets revenue can also include debt origination activity, and from what we can tell, that has been a strong story as well,” JPMorgan analysts wrote. “We thus believe that what looked like a quarter that should trend in line for the service companies could actually come out ahead.”

Transaction volume increased year-over-year for nearly all property types in September.

Office sales led the way with a 69% spike compared to September 2024. Retail followed with a 28% increase, then industrial at 25% and hotels at 15%.

The rise in office transaction volume coincides with the sector’s first vacancy rate decline since 2019. National office vacancy dropped 5 bps during the third quarter to 22.5%, according to JLL.

Multifamily was the only sector that didn’t experience a year-over-year transaction volume increase, as that sector declined by 5%.

September’s average cap rate for all deals was 6.38%, an increase of 4 bps over August. The multifamily sector’s 5.63% average cap rate was the largest month-over-month increase, at 14 bps, while industrial’s 6.1% average dropped 25 bps on the other end.