realestate

Commercial Real Estate Confidence Rebounds in Second Quarter 2025

Business confidence surges following Q2 survey results

T
he commercial real estate finance sector is experiencing a significant surge in optimism, according to the CRE Finance Council's Second-Quarter 2025 Sentiment Index. The index jumped 27.8% to 112.3, surpassing the neutral baseline of 100 and marking one of the strongest quarterly improvements on record.

    Renewed confidence is attributed to stabilizing interest-rate expectations and improving capital market conditions. The economic outlook has flipped positive, with only 27% of respondents expecting worse economic conditions over the next 12 months, a significant improvement from 80% last quarter.

    Market activity is also showing signs of recovery, with 86% of respondents being exceptionally bullish on financing demand, expecting more borrower interest. Investor demand soared, with 65% predicting an increase, and market liquidity shows a strong return, as 92% expect better or the same capital availability.

    Geopolitical shocks remain the top concern at 36%, followed by macroeconomic slowdown fears at 28%. However, a significant 71% of respondents reported an increasing appetite for new CRE lending or investment in the latter half of 2025. The emergence of AI-driven data center demand is also expected to have a positive impact on the overall CRE market, with 72% of respondents anticipating a positive outcome.

    Interest rate expectations have moderated, with 78% anticipating at least one 25 bps rate cut by year-end 2025. According to Lisa Pendergast, president and CEO of CREFC, "The turnaround in our Sentiment Index highlights the CRE finance industry's resilience and adaptability."

Commercial real estate professionals regain confidence in Q2 2025, US market.