CRE Shows Signs of Stability, Despite Uncertainty: 4Q 2024 ValTrends Report

Despite great uncertainty, pockets of the commercial real estate (CRE) market are showing signs of stability, and even some green shoots. That’s according to the latest ValTrends report, “Transition to Stability?” SitusAMC’s quarterly analysis of key trends in the economy, CRE sectors, capital markets and the investment environment. Download our free 25-page report for 4Q 2024 here. 

For example, CRE origination volume in 2024 was up 84% year over year, following exceptionally weak activity in 2023, according to the Mortgage Bankers Association (MBA). Other positive signs include shifting investor sentiment and more liberal underwriting. 

“Our data indicates a budding market thaw, as evidenced by an upturn in investor recommendations to buy CRE instead of hold,” said Peter Muoio, PhD, Senior Director of SitusAMC Insights. “Additionally, underwriting standards have eased toward more historical levels, even as capital remains constrained amid economic uncertainties and persistently high interest rates.” 

But Trump Administration policies are presenting a wild card for CRE’s outlook, including tariffs, immigration, DOGE initiatives and federal return-to-office policies.  

“Specifics about these policies are constantly changing with many unknowns,” said Jen Rasmussen, PhD, Vice President of SitusAMC Insights. “Not only are policy directives quickly evolving, but legal challenges put their implementation in limbo, making it difficult to determine whether existing policies will merely be delayed, or blocked altogether.” 

Overall CRE total returns rose 10 bps in the fourth quarter to the highest rate in more than two years, though capital returns remained negative, according to the NCREIF Classic NPI.  Industrial and apartment returns also hit the highest level in two years. Even office returns are improving, though they remain negative. 

Though transaction volume remains sluggish, prices appear to have stabilized. MSCI Real Assets’ National All-Property CPPI rose slightly in January, growing 0.5% month over month. Prices have hovered around the current level since around 2023. 

Explore full coverage of CRE markets in the fourth quarter of 2024 by downloading the ValTrends Report “Transition to Stability?” here. Our next “ValTrends First Look” webinar takes place on April 24, 2025 at 2pm ET, offering a forward-looking snapshot of the quarter ahead. Register here to attend. Learn more about SitusAMC Insights’ research, analytical tools or RERC data products on our website.