To quote Cat Stevens or Rod Stewart, depending on your preference, the first cut was probably the deepest, Kevin Fagan, head of CRE economic analysis at Moody's Analytics, said of the Fed's large September interest rate cut. During an interview with Yahoo Finance, Fagan said he expects an additional 25 bps cut over the next few months as the Fed remains cautious on strength in the labor market.

The CRE market is likely to react very slowly to the rate cut, said Fagan. And while inflation remains a concern, what really matters to commercial real estate is the certainty that is emerging around rates.

"We're actually starting to see transaction volume starting to tick up," noted Fagan. Year-over-year transaction volume went positive for the first time and last quarter marked the second quarter in a row of positive lending volume, he said.