The most notable area of weakness in last month's transaction data was across the retail space, which is not especially surprising as the K-shaped economy continues to pressure lower-income consumers.

Goldman real estate analyst Julien Blouin wrote Wednesday that the initial February reading on CRE transaction volumes showed a 13% year-over-year decline. He noted that transaction data from MSCI Real Assets is typically "revised materially higher" and said the early print is not a major cause for concern.

Blouin added that prior months were revised higher by roughly 24% to 25% on average, suggesting the final February reading will likely show transaction growth in the high single-digit territory once the data is finalized.

February Transaction Volumes

Volumes are muted and well below Covid surge. Need rates lower. 

Deal activity is improving in some areas, especially office and industrial. Multifamily faced a much tougher comparison versus the same period last year, so the decline looks a lot worse than the underlying trend. The sharpest drop in CRE transactions was in retail, which includes shops, strip malls, convenience stores, restaurants, and malls.