CRE Momentum Holds Strong in July

CRE momentum stayed strong in July 2025 with steady deal flow and active capital despite tariffs and rate uncertainty.

August 8, 2025

July’s 112.4 reading is 3% below June’s 2025 high of 115.6. Activity was supported by steady commercial listings, strong environmental due diligence, and the year’s highest lender appraisal volume.rn
Mortgage originations jumped 66% year-over-year in Q2. July transaction volume reached 2025’s highest level, showing sustained deal flow despite macro headwinds.rn
A softer labor market, tariff-driven cost pressures, and the Fed’s “higher-for-longer” stance create uncertainty. Most CRE professionals still expect activity to hold steady or increase in the second half of 2025rnrnrn

Key Takeaways

A Resilient but Cautious July

The July 2025 LightBox CRE Activity Index came in at 112.4. That is slightly below June’s multi-year high of 115.6 but well above the 100-point benchmark for healthy activity. July marked six straight months in triple digits and a 13% gain from last year.

LightBox CRE Activity Index (January 2023 - Present)

Inside the Numbers

Listings: Commercial property listings fell 7% from June but were 47% higher than last July.
Due Diligence: Phase I ESA activity dipped 6% month-over-month. It was still the third-strongest month of 2025.
Appraisals: Lender-driven appraisals rose 13% from June, reaching their highest monthly total this year.

Deal Flow Stays Strong

The LightBox CRE Transaction Tracker showed a 10% increase in July deal volume. This was the best month of 2025. Large transactions also hit their highest level this year. Mortgage Bankers Association data showed Q2 originations up sharply from 2024. Lenders remain active in financing both acquisitions and refinances.

The Headwinds

Macroeconomic signals are mixed. July brought a weak jobs report, softer corporate earnings, and higher input costs from new tariffs. These pressures, combined with the Fed’s fifth consecutive rate hold, are slowing growth in rate-sensitive CRE segments.

Sentiment Cautiously Improving

LightBox’s mid-year survey found 76% of CRE professionals expect stable or increased activity in the second half of 2025. CREFC’s lending sentiment index also jumped 27.8%. While no one expects a boom, the data suggests the industry is preparing for a busier close to the year.

Outlook

A fed rate cut later in 2025 or greater trade clarity could lift momentum in Q4. For now, CRE is balancing resilience with caution. The market is supported by active capital but challenged by macroeconomic and policy uncertainty.