Intelligent Investment
The Fed Rate Cut: Recovery Arrives in CRE
September 30, 2024 5 Minute Watch
Summary
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Americas President of Investment Properties, CBRE
Vice President, Head of U.S. Capital Markets Research, CBRE
- State of the market
The market has significantly improved compared to last year, with increased investment activity. - Investor behavior in a cutting cycle
CBRE anticipates the Fed to cut rates in a series of reductions through 2025. This will have a wide-ranging positive impact on commercial real estate, affecting investors and even banks. Overall, market participants view the Fed’s policy direction as a very positive development. - Opportunities and risks
We’re about three years from the last peak in investment, and sentiment is turning positive. Every cycle is unique, but the timing of this is similar to how other cycles have played out. More capital is now entering the market, allowing for some cap rate compression. - Generational opportunities
Challenges in the office sector are creating unique, long term investment opportunities. Multifamily’s sound fundamentals and strong outlook continue to create an attractive proposition over the long term.
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