📢Good morning,
Green Street’s All-Property Commercial Property Price Index rose 0.2% in September and 2.9% year-over-year, marking the first annual gain since 2022. Transaction volumes are rebounding — Q3 deal activity is up ≈ 14% YoY — as bid-ask spreads narrow and liquidity returns. Analysts call this a “flooring moment” for the cycle: more likely up from here than down, though gains will be modest.
📊 Quick Dive
Values +2.9% YoY: First annual growth in two years; prices still ~17% below 2022 peaks.
Office –36% from peak; Industrial/Retail –8–14% range.
Deal flow ≈ $65 B Q3, +14% YoY, suggesting improving market liquidity.
Read the full Signal
🏛️ Federal Shutdown Stalls CRE Projects and Data Releases — Reuters
The federal government shutdown has frozen permitting, delayed key economic reports, and complicated underwriting nationwide. Developers face stalled environmental and HUD approvals, and lenders have widened credit spreads by 25–50 bps to compensate for policy risk. With official data dark, CRE stakeholders are flying blind until agencies reopen. Most expect backlogs and higher carrying costs once the shutdown ends Read Full Signal →
🏠 Shutdown Strains D.C. Housing Market as Federal Cuts Bite — The Real Deal
Washington D.C. housing inventory has surged +55% YoY, the sharpest increase among major metros, as federal buyouts and furloughs sap demand. Median prices (~$599 K) remain flat for now, but continued uncertainty could trigger a 5–10% price dip by 2026. Rising condo fees and slow absorption highlight a market in pause mode — buyers waiting, sellers holding Read Full Signal →
🏦 Fed Cautious as AI Boom Inflates While Real Estate Cools — Reuters Analysis
A “two-speed economy” is testing the Fed: AI and tech investment is soaring while real estate slumps. Core inflation (~3–3.7%) and tech wage growth keep the Fed hawkish, even as CRE values sit ~17% below peak and office remains down 36%. Analysts expect a “higher-for-longer” stance through mid-2026, squeezing debt costs but favoring tech-linked property types like data centers and industrial. Read Full Signal →
Values appear to have finally stabilized — a critical turning point after two years of defensive posture. For operators and investors, that means pivoting from “survive mode” to “position for recovery.” Now is the time to refresh appraisals, lock financing rates, and pursue select value-add buys before competition returns. Distress is not spiking — and that in itself is a signal of confidence.
But execution risk has shifted to policy — shutdowns, federal funding freezes, and the Fed’s dual mandate are the new variables. Underwrite more for delays and liquidity management than for further value erosion. This is a market rewarding discipline and timing — not leverage.
Watch Green Street’s October CPPI (next month) and NCREIF Q3 data for confirmation of stabilization.
Shutdown resolution timing will dictate Q4 liquidity and project backlogs.
Fed expected to hold rates through early 2026; first cut possible if core inflation falls < 2.5%.
Infrastructure and housing in D.C./Midwest are the policy pressure points to watch through year-end.
