Commercial Real Estate Shows Signs of Life as Bidding Activity Stabilizes

After months of uncertainty and slowed activity, the commercial real estate (CRE) market is showing its first tangible signs of recovery this year. According to the latest data from JLL’s Global Bid Intensity Index, capital is flowing back into the market and bidding activity is beginning to stabilize. The July report marks the first improvement in the index since December 2024, signaling that investors are regaining confidence amid a backdrop of cautious optimism.

The Bid Intensity Index offers a real-time snapshot of liquidity and competitiveness in private real estate markets. By analyzing the dynamics of bidding activity, the index serves as an early indicator for future investment trends and transaction volumes. It tracks three key components:

• Bid-Ask Spread: The difference between a buyer’s final winning bid and the seller’s initial asking price.
• Bids per Deal: The average number of competitive bids received for each transaction.
• Bid Variability: The range and consistency of final bid pricing across deals.

The report highlights that stabilization in bidding comes as underlying market fundamentals remain largely resilient. Property valuations have generally held firm, and investor confidence is slowly returning despite a period of broader economic uncertainty earlier in the year.

“There is no shortage of liquidity in the market,” said Ben Breslau, Chief Research Officer at JLL. “Institutional investors are coming back with more sources of capital and a renewed appetite for real estate. While the recovery will likely be gradual, stabilized borrowing costs and valuations suggest momentum will strengthen through the latter half of the year.”

One of the sectors leading the recovery is “living” real estate, which encompasses multifamily apartments, senior living facilities, and student housing. The bid-ask spreads in this sector are narrowing, reflecting healthier and more predictable pricing dynamics. Investors appear particularly drawn to living assets due to stable demand and consistent rental income, even in a market with elevated interest rates.

Other sectors are experiencing varied outcomes. Retail properties are improving compared to last year but continue to face challenges from tariffs and changing consumer behavior. Industrial assets have lagged, as ongoing supply chain uncertainties and potential tariff shifts create caution among investors. Meanwhile, office properties are showing signs of a turnaround.

Increased bidding activity and more lenders offering competitive financing suggest that the office market may have reached a bottom after significant declines caused by the pandemic. A mix of bargain hunting and recovering fundamentals driven by more employees returning to physical workplaces is sparking renewed investor interest.

The JLL report emphasizes that investors are adjusting to a new normal of uncertainty, increasingly willing to accept higher risk in exchange for potential returns. Strong debt markets, combined with a willingness to pursue opportunistic deals, are helping to facilitate continued capital flow into CRE.

“The long-term appeal of commercial real estate as a store of value remains intact,” Breslau said. “As more investors move into a ‘risk-on’ mindset and capitalize on competitive debt markets, we anticipate continued growth in transaction activity, particularly in sectors with stable income streams and resilient fundamentals.”

For market watchers and investors, the improved Bid Intensity Index offers a reason for cautious optimism. While growth is unlikely to surge dramatically in the short term, the stabilization in bidding dynamics suggests that private real estate markets are finding a footing. The combination of persistent liquidity, solid asset fundamentals, and investor readiness to embrace calculated risk could set the stage for a steady rebound in commercial real estate through the remainder of 2025 and into 2026.

As sectors like multifamily and office properties continue to attract attention, analysts are watching closely to see if retail and industrial assets can follow suit. If bidding intensity continues to rise and spreads remain healthy, it could indicate that the worst of the slowdown is behind the market and that CRE is entering a new phase of measured growth. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.