Commercial real estate, which has been under valuation pressure since the Federal Reserve started increasing interest rates, is also poised to be a beneficiary of the central bank’s easing program, according to 2025 U.S. real estate market outlook from the team at Clarion Partners.
For the first time since second quarter 2022, institutional-quality U.S. real estate saw positive returns in third quarter 2024, as reflected in the quarterly NCREIF Property Index, which suggests we are nearing an inflection point.
The firm’s base-case expectations are for generally constructive economic growth, and with the presidential election in the rearview mirror and the Fed’s rate-cutting cycle now underway, investor sentiment should improve in 2025, leading to improved capital markets activity.
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