PERE Credit: A Rate Cut is Expected to Reignite Real Estate Transactions and Debt Activity.

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PERE Credit | The Federal Reserve’s latest 25-basis-point rate cut is expected to jump-start long-delayed commercial real estate transactions and bring greater clarity to capital markets after a prolonged period of uncertainty. Industry leaders note that while a single rate cut won’t solve structural challenges, it strengthens confidence that the Fed is entering a new easing cycle—one that could gradually improve liquidity and pricing across the sector.

However, the U.S. government shutdown has created a “data vacuum,” forcing policymakers to make decisions with limited visibility. Greg Friedman, CEO of Peachtree Group, cautions that inflation pressures, slowing hiring, and record household debt complicate the Fed’s balancing act. As a result, he expects financing costs to remain elevated even as short-term rates begin to fall, though he also sees opportunities for disciplined capital as valuations reset.

Economists and researchers added that despite near-term uncertainty, fundamentals point toward a market reset rather than systemic stress. REIT performance has rebounded sharply from 2023 lows, private valuations are stabilizing, and rising distress appears consistent with normal cycle dynamics—not signs of a broader breakdown.

Overall, experts anticipate momentum will build, but note that the recovery will unfold gradually as investors adjust to a more stable, but still cautious, environment.


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