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CBRE Investor Survey Shows Optimism Despite High Rates

January 27, 2025

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CBRE has released the results of its latest Investor Intentions Survey, revealing mostly positive findings. Among the firms surveyed, 54% expect investment activity to recover in the first half of 2025. Optimism about individual portfolios was even higher, with 75% of respondents anticipating their own investment activity to rebound during the same period.

The greatest obstacle to investment, according to respondents, remains “elevated and volatile long-term interest rates.” Despite former President Trump’s recent declaration that he would push for interest rates to decrease, CBRE forecasts that rates will stay above 4% through the end of the year. Even if the Federal Reserve lowers the base rate, it may not significantly reduce rates for commercial property loans. Many banks that ceased lending to commercial real estate when rates rose have yet to return. Their replacements, such as debt funds and private lenders, typically charge higher rates, further increasing borrowing costs.

Still, expectations of lower rates and improving economic conditions have spurred greater investor interest in acquisitions. According to the survey, 70% of respondents plan to buy more commercial real estate assets than they did last year. But, these investors may face stiff competition due to a limited supply of listings. Fewer than half of the investors surveyed indicated they expect to sell more properties this year than last.

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