CRE Activity Is Coming Back: As the FED delays rate cuts, buyers and sellers are finally adjusting their expectations.
After four years on a rollercoaster that began with the 2020 COVID-19 pandemic and continued through its aftermath into recovery, the commercial real estate industry is gradually coming to accept a new reality, boosted by what is overall a strong economy. A slow transactions market could pick up toward the end of the year as investors realize that practically free money is gone but is still historically cheap, strong employment boosts the economy, a presidential election is decided, and demographic trends force action.
It’s taken time, and some sectors (especially office) continue to cope with societal shifts, but the bounce back after years of turmoil is taking shape. Stable or growing economic activity will likely encourage the Fed to hold rates steady for longer. The real key is interest rates. Even a minor cut toward year-end could trigger long-delayed transactions. Growing markets, especially in the South and West, will continue to grow. Patience is the key. Download the report here.
