The commercial real estate market is experiencing steadily improving liquidity conditions in some pockets of real estate capital markets, while overall liquidity conditions remain relatively muted, according to the latest Liquidity Index from Madison International Realty.
The index, which measures the ease with which asset owners and investors are able to enter and exit real estate limited partnerships, reports a liquidity score of 20.6 for second quarter 2025, marking its fifth consecutive quarter of improvement. While still muted, the index is rising toward normalized liquidity conditions — readings in the 40s and 50s — that Madison observed in the 2017-19 pre-COVID period and the 2021-22 post-vaccine, pre-rate hike period.
In recent years, the Madison Liquidity Index observed a period of profound illiquidity between third quarter 2022 and third quarter 2024 — the longest period of poor liquidity since the Global Financial Crisis. Since the end 2024, however, l
