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CRE Investor Optimism Rises Amid Falling Interest Rates

But transaction activity may take several quarters to bounce back.

By Mario Marroquin | November 21, 2024 at 06:29 AM

Investors in commercial real estate are growing increasingly optimistic as the Federal Reserve signals the possibility of rate cuts through 2025, according to a report from Colliers. After months of waiting on the sidelines during the central bank’s aggressive tightening cycle, both buyers and sellers are now gearing up for a market rebound, driven by more favorable conditions.

Multifamily and industrial properties are expected to dominate transaction activity, as these sectors continue to show strong fundamentals. Multifamily remains a top target for investors, particularly in high-growth regions across the Southeast and Southwest, where population growth is driving demand for housing. Despite supply pressures from recent developments, markets like Florida and Texas remain competitive. Meanwhile, core markets along the coasts, including New York and Los Angeles, continue to appeal to institutional players seeking stability.

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