Summer’s Over; Time to Take Stock – Sept. 2, 2025
Recent industry surveys point to stabilizing market conditions
Although the autumnal equinox is still a few weeks away as this is written, the end of the Labor Day weekend effectively marks the end of summer. Schools are back in session, summer hours have ended at businesses that observe them and investors in all disciplines are preparing for a productive fourth quarter. Yet this is still a transitional moment and as such, an opportunity to take stock.
Throughout the summer, Connect CRE has featured surveys and reports that gauge the commercial real estate industry’s appetite for dealmaking, now and in the near term. The broad conclusion is that market conditions are stabilizing even as challenges persist. Here’s a sampling:
- LightBox’s Mid-Year 2025 CRE Market Sentiment Survey, which drew on responses from 237 professionals across investment, brokerage, appraisal and environmental due diligence, found that 76% expect deal activity to either increase (42%) or hold steady (34%) through the remainder of the year. “Despite a first half that didn’t quite play out as expected with growing uncertainty around interest rates and tariffs, our survey shows that the CRE market is gearing up for a more active second half,” said Dianne Crocker, research director at LightBox. Interest rates remain a key concern among survey respondents, so it’s a safe bet that the outcome of the next Federal Open Market Committee meeting (Sept. 16-17) will be very closely watched.
- The Real Estate Roundtable’s Q3 2025 Sentiment Index posted an overall score of 67, a 13-point increase from the previous quarter, with significant increases in both the Current (63) and Future (71) indices. “Commercial real estate executives are increasingly optimistic that the next 12 months will bring continued improvement,” said Roundtable president and CEO Jeffrey DeBoer. “That said, certain property types continue to face headwinds, and capital access remains uneven across markets and sectors. Even so, the prevailing sentiment is that stability is returning and opportunities are emerging.” (For in-person insights from DeBoer and multifamily industry leaders, be sure to register for Connect Apartments 2025, scheduled for Sept. 11 in Los Angeles.)
- The CBRE Lending Momentum Index rose by 45% year-over-year in the second quarter as financing for commercial real estate projects increased. Jaeyoung Kim, associate director, capital research at CBRE, told Connect CRE’s Amy Sorter that credit spreads tightened to more balanced levels over the course of Q2, helping to boost origination across all lender types. “As policy clarity improved and market participants adapted to economic conditions, all lender types were active,” she said. “Notably, private credit lenders and CMBS experience the highest uptick in volumes.”
- JLL’s Global Bid Intensity Index, which analyzes proprietary bid data across investment sales transactions to identify areas of acceleration or deceleration, shows bidding dynamics stabilizing as property performance fundamentals hold up and asset valuations remain consistent—and as more investors accept macroeconomic uncertainty as the new normal. In particular, the bid-ask spread is narrowing across numerous property types, notably in the living sector (comprising apartments, student housing and senior living). “The attractiveness of CRE investments as a long-term store of value remains intact,” said Ben Breslau, chief research officer at JLL. “As more investors move to a ‘risk-on’ mode, coupled with the exceptionally strong debt markets, we expect this will lead to continued growth in capital flows.”