A
recent uptick in commercial real estate activity suggests that the sector is on the move again, despite earlier uncertainty. According to JLL's global Bid Intensity Index, capital is increasing and bidder dynamics are stabilizing, with improvement seen in July for the first time since December.

    The index measures bidding activity to gauge liquidity and competitiveness in private real estate markets, indicating future capital flows across investment sales transactions. Its three sub-indices - bid-ask spread, bids per deal, and bid variability - show stabilization in bidding dynamics as property fundamentals hold up and asset valuations remain firm despite weaker investor sentiment.

    "Institutional investors are returning to the market with more capital sources and a renewed appetite for real estate," said Ben Breslau, JLL's chief research officer. "While recovery will be gradual, borrowing costs and real estate values have stabilized, so we expect momentum to pick up in the second half of the year."

    Bid-ask spreads are narrowing across multiple sectors, with the "living" sector - including multifamily apartments, senior living, and student housing - showing significant improvement. Retail is doing better than last year but has declined recently due to tariffs, while industrial remains a laggard due to supply chain uncertainty.

    Office bid dynamics are improving, driven by growing numbers of bidders and lenders quoting on office loans. Some investors believe the office market has hit bottom after its Covid-induced crash, with fundamentals strengthening as more people return to work. Overall deal demand is rising as investors accept uncertainty as the new normal and take on higher risk.

    "The attractiveness of CRE investments remains intact," said a JLL report. "As more investors move to a 'risk-on' mode, coupled with strong debt markets, we expect continued growth in capital flows."