Fed Delivers Another Rate Cut as CRE Deal Volume Heats Up

Lower rates are pulling Treasury yields down and pushing transaction momentum up across CRE.

Jordan B.
October 30, 2025

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Good morning. The Fed delivered another rate cut, but the path forward just got murkier. With policymakers split and economic data delayed, investors face both opportunity and uncertainty heading into year-end.

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Rate Relief

Fed Delivers Another Rate Cut as CRE Deal Volume Heats Up

A second straight rate cut from the Fed is adding momentum to a CRE market already showing signs of life—but caution flags are up for December.

What happened: The Fed cut rates by 25 bps to 3.75%–4%, its second in two months and a 150 bps drop over the past 12 months. The vote revealed deep divisions, with some pushing for a bigger cut and others for none. Powell called December's outlook “far from” certain.

Financing tailwinds—and turbulence: The 10-year Treasury briefly fell below 4% before rebounding during Powell’s remarks, as hopes for more cuts cooled. Moody’s Chris Stanley called the sub-4% yield a “momentary gift” for borrowers eyeing refinancing or hedging.

Data delays: The ongoing government shutdown has stalled key economic data, with inflation at 3% and estimated unemployment at 4.3%. The lack of clarity is complicating the Fed’s outlook, and Chair Powell says a December rate cut is “not a foregone conclusion.”

Momentum building: Even before the Fed’s move, CRE was gaining steam. September deal volume hit $42B, up 19% YoY, with office sales up 42% midyear. Investors are entering Q4 with improved confidence and a clearer sense of value

Caution from the Fed’s corner: Some FOMC members, wary of rekindling inflation, are pressing for a pause in rate cuts. Powell emphasized the central bank’s “credible commitment” to returning inflation to 2%, while also downplaying the likelihood of aggressive easing unless risks to employment become clearer.

➥ THE TAKEAWAY

Window of opportunity: The rate cut provides much-needed relief, but the Fed is signaling that further easing isn’t a given. With volatility still in play and data uncertainty growing, investors should move decisively to lock in financing and finalize deals before conditions potentially tighten again.

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✍️ Editor’s Picks

Multifamily insights: 25% ownership premium is reshaping rental demand and occupancy trends, setting the stage for growth and strategic investment opportunities across multifamily markets. (sponsored)
Reality gap: 90% of CRE firms are piloting AI, but just 5% have met their goals, exposing a growing gap between ambition and execution.
Rent plateau: The NCREIF Property Index posted a 1.22% return in Q3, virtually flat from Q2, as the sector remains in a holding pattern.
Decade of disruption: Crexi is celebrating 10 years of disrupting CRE with $1T in streamlined deals as it kicks off its AI era with Vault to automate data and broaden access. (sponsored)
Secondary strategy: Warburg Pincus and Madison International Realty are investing $300M in discounted real estate secondaries, targeting data centers, industrial, and residential assets.
Mayoral effect: NYC fears a Mamdani shake-up, but other cities show progressive agendas often stall in practice.
Income opportunity: A new NYC bill aims to partially roll back Airbnb restrictions, letting small homeowners rent short-term.
Asset milestone: Invesco hit a record $2.1T in AUM in Q3, driven by $28.9B in net inflows—its best since 2021.

🏘️ MULTIFAMILY

Insurance gap: Renters are nearly three times more likely to be uninsured than homeowners, with those in single-family rentals facing the greatest risk.
Housing crisis: Preserving U.S. public housing will require over $70B to address urgent repair and modernization needs.
Infill opportunity: Los Angeles is seeking private developers to build housing on 12 city-owned lots as part of the "Small Lots, Big Impacts" initiative.
Capital constraints: Despite surging demand from a rapidly aging population, senior housing construction has stalled due to high costs and financing constraints.
Long-term leasing: While affordability still drives most U.S. renters, nearly half now rent by choice, reflecting a growing long-term preference for flexibility.
Price softening: Apartment rents fell for a fourth straight month in October, as high supply, cooling demand, and economic uncertainty are reshaping rental markets across the U.S.

🏭 Industrial

Strategic downsizing: Tri-State industrial owners are downsizing warehouses to attract smaller tenants like 3PLs, as vacancies rise and rents fall.
Smart space: AI is streamlining industrial real estate, but its impact on space demand is still unclear.
New partnership: Centerbridge and Reframe have launched a $500M JV to buy and operate top-tier self-storage assets nationwide.
Bay play: Brennan Investment Group acquired an 80,000 SF industrial building in Chicagoland’s I-55 corridor, aiming to reposition it into small-bay suites.
Power pact: Brookfield, in partnership with the U.S. government and Westinghouse, will develop $80B in new nuclear projects.

🏬 RETAIL

Strip strength: Nuveen is doubling down on grocery-anchored, open-air retail centers, citing strong demand, low vacancies, and stable returns.
Tenant-driven: Q3 2025’s net lease market saw cap rates compress across high-demand sectors like car washes, QSRs, and industrial.
Fueling frenzy: Bonus depreciation is driving a year-end buying spree for gas stations and car washes, tightening cap rates and boosting investor demand.
Tariff impact: Carter’s will close 150 stores and cut 300 office jobs to offset rising tariff costs and protect profitability.
Queens commitment: Burlington leased 42K SF in a new Jackson Heights development, expanding its NYC retail presence.
Acquisition blitz: Curbline has acquired 69 convenience strip centers for $644M in 2025, doubling its portfolio just a year after spinning off from Site Centers.

🏢 OFFICE

Normalizing flex: Coworking now spans 152 MSF across 8,420 U.S. locations, signaling a shift from rapid expansion to steady, strategic growth.
Anchor effect: Anchor tenants are driving a surge in new office development, tightening vacancy and sending Class A rents to record highs.
Biotech bust: Alexandria shares fell 19% after slashing guidance, citing rising vacancies and weak life sciences demand.
Senior shift: Welltower is selling 18M SF of medical office space for $6B and doubling down on senior housing, with $14B in acquisitions across 700+ communities.
Office interest: Foreign investment in U.S. office jumped sixfold to $877M last quarter, led by renewed demand in Manhattan and San Francisco.
Government drag: JBG Smith’s Q3 losses deepened as federal job cuts hit D.C. demand, with rising debt and high vacancies challenging its recovery efforts.
Job cuts: Amazon and UPS announced a combined 48,000 job cuts and dozens of office closures in Q3, as both companies streamline operations and reinvest in AI.
Vacancy looms: Kilroy Realty saw a Q3 leasing rebound with 552K SF signed—its best third quarter ever—but still faces 970K SF in looming expirations.

🏨 HOSPITALITY

Local legacy: Bethesda’s beloved Woodmont Grill closed after decades of service, marking the end of an upscale dining era in the heart of downtown.
PAC push: Miami Beach mayor Steven Meiner has drawn major real estate and hospitality donations despite development pushback and personal controversies.
Naples upgrade: Cooper Hotels has acquired the Hampton Inn & Suites Naples-Central, marking its second property in Naples and seventh in Florida.