Intelligent Investment
2025: A New Era of Activity
December 17, 2024 6 Minute Watch
Summary
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Group President and Co-Head, US & Canada, Capital Markets, Advisory Services
Head of U.S. Investor Research
- Rate-Cutting Cycle
We’re in a much better operating environment than at the start of 2024. We’re in a short-term rate-cutting cycle, which is helping floating rate debt. However, the market is also adjusting to rates around 4% to 4.25% on the long end of the curve, allowing for improved activity. - Bank Return to the Lending Market
The big story moving into 2025 is the return of the banks. The major money center banks have re-entered the market in Q4 2024. They’re active in parts of the market like multifamily, industrial, self-storage, data centers, and grocery-anchored retail. - Large Banks Lead the Rebound
Significant work has been done behind the scenes to strengthen large banks’ balance sheets. This, combined with existing loan payoffs, has allowed larger banks to return to CRE lending. Still, smaller regional and community banks are likely to remain less active lenders to CRE over the coming year. - Improved Capital Markets Outlook
Both debt and equity markets are in good shape, with abundant capital available. Although bid-ask spreads are a challenge, we anticipate market participants will come into better alignment in 2025. Overall, CBRE expects a moderate recovery in investment activity in 2025.
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