According to the latest survey from the CRE Finance Council (CREFC), market confidence continues to improve, reaching a record high of 126.6 in the fourth quarter of 2024. This reflects sustained optimism about market conditions, despite expectations adjusting to a “higher-for-longer” interest rate environment.
The survey also showed that economic performance is expected to improve over the next year, with 42% of respondents expressing this sentiment compared to only 32% in Q3. Additionally, there is growing confidence in government actions positively impacting CRE finance-related businesses, with 74% expecting a positive impact compared to just 17% last quarter.
Furthermore, there has been significant improvement in outlook for fundamentals such as asset prices and transaction volumes. Sixty-five percent expect improvement (up from 40%) while only12% anticipate worsening conditions (down from23%). Overall industry outlook has also improved significantly with77 % expressing positive sentiment and no negative responses.
Lisa Pendergast,president and CEO of CREFC,stated that these results suggest thattheCRE finance industry believes themarketis on solid footing heading into2025.Despite concerns about higher interest rates,the members see stabilizing asset prices,rising transaction volumes,and consistent demand for financinginthe commercial real estate sector.Pendergast addedthatthis resilienceindicatesa strong futureforth
