It has only been weeks since the Federal Reserve began cutting interest rates, but the policy shift is already drawing some investors back into the market. According to a new report from LightBox CRE, commercial real estate investors who had been sitting on the sidelines waiting for cuts are now starting to return and deploying capital toward ancillary services tied to real transactions.

LightBox, which tracks aggregate activity in listings, environmental due diligence, and appraisals, noted that the change in policy signals to the market that lending costs are expected to drop for the first time in four years. While uncertainty persists about inflation, the upcoming election, port strikes, labor market strength, and the extent of market distress, the start of the interest rate-cutting cycle is beginning to lift sentiment, according to LightBox.

"The 50 basis-point cut was an unexpected but welcome surprise for commercial real estate, providing a psychological boost," said Manus Clancy, head of data strategy at LightBox. "Even a 25 basis-point cut would have signaled to the market that a new era of capital deployment has finally begun."