National transaction volume is having its best year since before the rate-driven slowdown, with nine straight quarters of year-over-year growth and July posting the strongest monthly total since 2005. But we believe the composition of that recovery matters more than the headline number, and it changes how developers and brokers should be reading market signals right now.
The core numbers: Q1 2026 volume came in between $117 billion and $136 billion depending on the data source, up 19%–27% year-over-year, with trailing 12-month volume near $534 billion. July alone hit $74.4 billion, up 78% year-over-year. The catch is concentration — roughly $34 billion of that July total came from data center transactions alone, and total activity excluding data centers was up only about 1% year-over-year. The marquee deal driving the digital infrastructure share was Digital Realty’s $7.8 billion purchase of Blackstone’s interest in three fully leased Northern Virginia data centers, and Blackstone, Brookfield, and other major capital allocators are actively building permanent-capital vehicles specifically to keep buying this asset class. Strip that sector out, and the “recovery” looks far more muted.
Deal sizing tells a second, related story: median deal sizes hit all-time highs across every major property type in Q1, and the share of transaction value from deals over $10 million crossed 50% for the first time since 2022. That’s institutional capital re-entering at scale — not a broad-based recovery in smaller, private-buyer transactions. Sector mix reinforces the same theme: industrial accounted for 22.4% of transaction value but just 14.8% of properties traded, the widest value-to-count gap of any sector, meaning industrial dollars are concentrated in fewer, larger trades rather than broad-based activity. Pricing is still rising — a twelfth straight quarter of record price-per-square-foot — but the growth rate is cooling, and the gap between winning and lagging sectors (industrial up nearly 90% since pre-pandemic versus office up roughly 37%) is now being described as a structural repricing rather than a cyclical recovery gap.
Here’s what this may mean for deals in your pipeline right now:
Don’t read national volume numbers at face value. When a client or partner cites a “market recovery” statistic, ask what’s driving it. A headline number built substantially on data center and digital infrastructure activity says very little about conditions in office, retail, or traditional multifamily deals.
Treat data center and digital infrastructure exposure as its own asset class in conversations with clients. The capital chasing this sector — permanent-capital REIT vehicles, sovereign and institutional money, hyperscaler-backed net leases — is behaving differently than capital in the rest of CRE. Advise accordingly rather than assuming the same underwriting logic applies.
Watch the $10 million-plus share as a leading indicator, not a lagging one. Institutional capital returning to larger deals ahead of smaller private buyers often signals where liquidity will show up next. Smaller, non-institutional sellers may still be facing a thinner buyer pool than the headline recovery suggests.
Use the industrial-versus-office pricing gap to reset client expectations on comps. With sectors now structurally diverging rather than cyclically converging, comparables from a single “CRE market” recovery narrative will mislead clients holding assets in lagging sectors. Underwrite and price sector-by-sector, not off blended national trends.
Flag the concentration risk to clients considering broad market timing calls. A recovery this concentrated in one asset class is more fragile to sector-specific shocks — regulatory changes affecting data center siting or financing, for instance — than a broadly distributed recovery would be. Build that sensitivity into any market-timing advice you’re giving.
The market is genuinely healthier than it was two years ago. But the recovery is narrower than the topline numbers suggest, and the sponsors and brokers who understand which sector is actually driving the trend may be better positioned than those reacting to the aggregate headline.
