Commercial real estate is staging a comeback, though not one that lifts all segments equally. REITs have rallied about 35 percent from their 2023 lows, valuations across the four major indices appear to have bottomed, and transaction volumes have risen year-over-year for six straight quarters. Distress, a lagging indicator, continues to inch higher.
On the surface, the cycle is following its usual pattern: Public markets bottom first, private valuations follow 12–18 months later, and delinquencies peak roughly two years after. Beneath the surface, however, returns are diverging across property types, geographies and funds — pointing to a market where active selection matters.
Investors are no longer facing a downturn; they are navigating dispersion. As the adjustment period clears, the landscape increasingly favors selectivity, income durability and strategic conviction.
Taking stock of the recovery
Data shows commercial real estate i
