The 1Q25 JBREC + CRE Daily Fear and Greed Index is now available, offering timely insights into investor sentiment in the commercial real estate (CRE) industry. As we move into 2025, higher interest rates and policy uncertainty continue to cast a shadow over the market, leading to a largely stagnant outlook among CRE investors.
According to our 1Q25 survey, the Fear and Greed Index remained flat at 56, signaling a cautious optimism that has not gained momentum since the previous quarter.
While Industrial and Multifamily remain the most favored sectors, overall investor sentiment softened due to concerns over a higher-for-longer rate environment and unpredictable policy changes.
Signs of Stability but Few Gains
The report highlights that across nearly all CRE sectors, market conditions either declined or remained unchanged in 1Q25. The Office sector, despite its ongoing struggles, showed early signs of a potential bottoming out, with opportunistic investors stepping in to take advantage of perceived value opportunities.
Access to Capital: A Key Constraint for 2025
One of the biggest takeaways from the survey is that capital access remains a top concern, with 42% of investors citing interest rates and capital costs as their biggest hurdle in 2025. This challenge is exacerbated by the Federal Reserve’s recent stance on inflation risks, which has led to a scaled-back outlook for rate cuts this year.
- 30% of CRE investors reported harder access to capital in 1Q25 compared to just 11% who found it easier.
- CRE loan interest rates averaged 6.9% in Q1, contributing to the ongoing investment slowdown.
- The Office sector remains an exception, where weak tenant demand outweighs capital concerns as the biggest issue.
Policy Uncertainty: A Silent but Growing Concern
Although only 8% of investors named policy risk as their top concern, many flagged it in their commentary, indicating that policy shifts remain a wildcard factor in 2025.
- Investors noted uncertainty around federal policies affecting their ability to price deals effectively.
- Concerns about immigration enforcement impacting occupancy rates in states like Florida and Texas were frequently mentioned.
- Some investors worry about tariffs and federal layoffs that could dampen broader economic growth.
Download the Full Survey Results
The 28-page survey chartbook provides deeper insights and visuals into investor sentiment, capital trends, and the evolving CRE landscape. Download the complete report for a sector-by-sector breakdown and exclusive investor commentary.
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