**CREFC Sentiment Index Returns to Positive Territory in Q2 2025**
The CRE Finance Council (CREFC) has reported a significant rebound in its Second-Quarter 2025 Board of Governors Sentiment Index. The index surged by 27.8%, climbing to 112.3 from 87.9 in the previous quarter—one of the strongest quarterly improvements in the index’s history. This marks a decisive return to positive territory, surpassing the neutral baseline of 100 and reversing the sharp decline experienced in Q1.
Expectations surrounding the broader economic outlook have also improved notably. Only 27% of respondents now anticipate worsening economic conditions over the next 12 months, a sharp decline from 80% in the previous quarter. Meanwhile, 54% expect economic conditions to remain stable, and 19% foresee improvement.
The survey also shows stabilization in commercial real estate (CRE) fundamentals. Only 19% of respondents expect conditions to worsen, compared to 50% in Q1. Borrower demand has seen a dramatic upswing, with 86% of respondents predicting increased demand—up from 48% last quarter. Significantly, no respondents expect a decline in borrower demand. Overall, 49% now hold a favorable market outlook, more than doubling from 22% earlier this year.
Lisa Pendergast, President and CEO of CREFC, commented, “The turnaround in our Sentiment Index highlights the CRE finance industry’s resilience and adaptability. What’s especially encouraging is the breadth of the recovery, from robust borrower demand to optimism around AI-driven data centers. Challenges remain, but the market is regaining its footing.”
This uptick in sentiment reflects growing confidence across the industry as it navigates a complex and evolving economic landscape.
