
NEW YORK, Jan. 28, 2025 — The CRE Finance Council (CREFC), the industry group representing the $6.1 trillion commercial and multifamily real estate finance sector, today announced its Fourth-Quarter 2024 (4Q24) Board of Governors (BOG) Sentiment Index survey findings. The survey, conducted from December 19, 2024, to January 6, 2025, reveals ongoing market sentiment improvement, despite evolving interest rate perspectives.
The 4Q24 Sentiment Index shows continued growth in market confidence, climbing 5% to 126.6 from 121.1 in 3Q24, marking its highest-ever reading. This rise reflects sustained optimism regarding market conditions, even with adjustments to expectations for a sustained period of higher interest rates.
Key Findings from the 4Q24 Core Questions:
- Economic Outlook: Optimism is increasing, with 42% of respondents anticipating better economic performance within the next year, up from 32% last quarter.
- Federal Policy: Sentiment regarding government actions has shifted dramatically, with 74% expecting a positive impact on CRE finance-related businesses, a significant increase from 17% last quarter.
- Rate Impact: Expectations of a positive rate impact have noticeably decreased to 33% from 85%, with most respondents (58%) now neutral.
- CRE Fundamentals: The outlook for fundamentals has significantly improved, with 65% expecting improvement (up from 40%) and fewer anticipating worsening conditions (12% vs 23%).
- Transaction Activity and Financing Demand: Expectations for both investor demand and borrower financing needs have further strengthened, with 86% and 91%, respectively, forecasting increased activity.
- Market Liquidity: Confidence in debt capital markets liquidity continues to improve, with 81% expecting better conditions, up from 77% last quarter.
- Overall Sentiment: The industry outlook has strengthened considerably, with 77% expressing positive sentiment, up from 57% last quarter, and no negative responses.
Additional Topical Observations:
The survey indicates that while persistently higher interest rates remain the top concern (51% of respondents), the industry seems to be adapting to this new reality. A large majority (95%) of respondents anticipate a minimum 10% increase in CRE transaction volume in 2025, suggesting growing confidence in market activity despite interest rate challenges. Notably, respondents identified multifamily (30%) and office (23%) properties as the sectors presenting the most attractive risk-adjusted investment opportunities.
Lisa Pendergast, CREFC President and CEO, stated: “The 4Q24 survey results overall suggest the CRE finance industry believes the market is on firmer ground as we enter 2025. While concerns about prolonged higher interest rates continue, our members are seeing stabilizing CRE asset values, rising transaction volumes, and consistently strong demand for CRE financing.”
For more information on the 4Q24 BOG Sentiment Index and complete survey results, please click or contact Raj Aidasani at .
About CREFC and the Board of Governors Sentiment Index
The CRE Finance Council (CREFC) is the trade association for the commercial real estate finance industry. CREFC has approximately 400 member companies and 19,000 individual members. CREFC members play a crucial role in the U.S. economy by financing office buildings, industrial properties, multifamily housing, retail spaces, hotels, and other commercial and multifamily real estate.
CREFC’s Board of Governors comprises over 50 senior executives from across the commercial real estate finance markets. These leaders represent all segments of the commercial real estate lending and mortgage-related debt investing markets, including balance sheet and securitized lenders, loan and bond investors, mortgage bankers, private equity firms, loan servicers, rating agencies, legal professionals, accountants, and more.
CREFC’s BOG Sentiment Index aims to measure quarterly changes in CRE finance market conditions. First implemented in 2017, the survey includes nine core questions and additional topical questions. Responses to core questions are equally weighted and aggregated to create a single index value.
SOURCE CRE Finance Council
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