Commercial real estate investors may need to rethink the assumption that lower interest rates automatically lead to stronger returns, according to Newmark Research. After analyzing three decades of data, the firm found easing cycles have produced the weakest three-year commercial real estate returns, at 4.3 percent, while stable rate environments have produced the strongest returns, at 9.3 percent. The report argues rate stability, rather than rate cuts alone, has historically been more supportive of commercial real estate performance.
Newmark also points to a changing macroeconomic backdrop marked by slower demographic growth, weaker employment growth and a relatively stable unemployment rate. That environment could make demand growth more uneven across property types and markets. For investors, the playbook may require greater focus on asset se
