CREFC's 4Q 2024 Sentiment Index Shows Broad Optimism as Market Stabilizes
- Editor
- Jan 28
- 2 min read
What's Happening: The CRE Finance Council's latest sentiment survey reveals growing confidence in the commercial real estate finance sector. The 4Q24 Sentiment Index rose 5% to a record high of 126.6, reflecting optimism about market conditions despite expectations of higher interest rates for longer.
The Key Moves:
Economic outlook improved, with 42% expecting better performance over the next 12 months, up from 32% in Q3.
74% expect positive impact from federal policies on CRE finance businesses, a dramatic increase from 17% last quarter.
86% anticipate increased investor demand for transactions, while 91% expect higher borrower financing needs.
By The Numbers :
The Sentiment Index reached an all-time high of 126.6, up 5% from 121.1 in Q3 2024.
95% of respondents expect CRE transaction volume to increase by at least 10% in 2025.
81% anticipate improved debt capital markets liquidity, up from 77% in the previous quarter.
Key Quotes:
"Overall, the 4Q24 survey results suggest that the CRE finance industry believes the market is on more solid footing heading into 2025," said Lisa Pendergast, President and CEO of CREFC.
"While concerns about higher-for-longer interest rates persist, our members see stabilizing CRE asset prices, rising transaction volumes, and a demand for CRE financing that remains both consistent and resilient," Pendergast added.
The survey revealed that 51% of respondents consider higher-for-longer interest rates as the primary concern for the industry.
The Bottom Line: The CRE finance industry is showing increased optimism heading into 2025, with expectations of higher transaction volumes and improved market conditions. While concerns about interest rates persist, the sector appears to be adapting to the new environment, with multifamily and office properties seen as offering the best risk-adjusted investment opportunities.
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