Trepp named its top choices for bull and bear CRE metro markets and did the same for the single most property type and metro combination, during July 2024. The firm is trying to identify what drives positive and negative investor sentiment.

At the top of the bulls is Seattle-Tacoma-Bellevue, WA. The economy is still strong, even with problems at Boeing, because there are still Amazon, Microsoft, Starbucks, Costco, and Nordstrom. There are many maturing CRE loans, but little CRE distress compared to other regions. Of the current outstanding loan balances, 5.67% originated in the last 12 months, which is a slight pullback, and 8.50% will mature in the coming 12 months. The region has the highest overall average cap rate at origination and the lowest delinquency and special servicing rates. Right now, distress and issuance are looking good.

Number two bull is Phoenix-Mesa-Scottsdale, AZ. It also saw a slight pullback in recent originations, with only 7.81% having happened in the last 12 months. And 10.42% of current outstanding loan balances will mature in the next 12 months, which is something to monitor. But there's a big population and the CRE market has a low delinquency rate combined with a high average debt service coverage ratio (DSCR). Retail and lodging markets are strong.