Morning,
The past three years have reshaped the commercial real estate landscape more profoundly than any period since the Global Financial Crisis. Interest rates rose rapidly, liquidity tightened, operating costs surged, and a new generation of sponsors discovered that rising tides do not lift all boats equally.
The result is a market many describe as frozen or distressed. But the data tells a more nuanced story. Beneath the headlines, conditions are forming that typically mark the beginning of strong real estate vintages. Pricing is resetting, liquidity is returning, fundamentals are stabilizing, and forced seller dynamics are emerging across wider swaths of the market.
Below are ten reasons why now looks like one of the most attractive real estate entry points since the GFC.
1. Pricing Has Clearly Reset
After a long expansion, U.S. commercial real estate has undergone a broad repricing.
- Unlevered values in the NCREIF Property Index are down about 19 percent from their Q2 2022 peak, with core open end fund values down roughly 25 percent.
- MSCI’s October 2025 update shows U.S. commercial property prices still well below peak levels even after posting a 4.2 percent year over year gain, the strongest annual increase in three years.
- Green Street’s all property CPPI likewise has U.S. commercial values roughly the mid teens below 2022 highs.
In parallel, both Cohen & Steers and Clarion Partners have recently argued that private real estate is moving into a new cycle after a clear trough in 2024.
Historically, cycles that follow a 15 to 25 percent real price reset have produced some of the best forward returns when capital steps in early.
2. A Large, Dated Loan Maturity Wall Is Building Forced Activity
The old ‘2024 to 2026 wall of maturities’ is now more focused in 2026 and beyond, but it is still very real.
- A late November 2025 brief citing S&P Global data projects about $936 billion of U.S. commercial mortgages maturing in 2026, up nearly 19 percent from 2025, with maturities peaking at roughly $1.1 trillion in 2029.
- Late 2025 surveys highlight that most owners with near term maturities expect to seek extensions or restructurings, but a meaningful minority anticipate selling assets or handing back keys, particularly in office and weaker retail. (Bisnow)
This is not a classic macro driven collapse. It is a calendar driven refinancing squeeze for assets financed at 2021 pricing on 2021 debt terms. Time alone is enough to bring inventory to market, even if the broader economy muddles through.
3. The Bid ask Spread Is Narrowing And Volumes Are Rising
For roughly two years, sellers anchored on old values while buyers underwrote to much higher financing costs. That gap is now closing.
- An October 2025 analysis by MSCI shows U.S. CRE transaction volume up 17 percent year over year in Q3 2025, with particularly strong momentum in multifamily. (Seeking Alpha)
- A late September 2025 piece in GlobeSt notes that ‘CRE market psychology’ is narrowing bid ask spreads and speeding up transactions as both sides converge on the new pricing reality. (Globest)
- A November 2025 article from Berkadia describes capital ‘flowing back into commercial real estate’ and explicitly notes that the bid ask gap between buyers and sellers is narrowing as underwriting assumptions stabilize. (REBusinessOnline)
Price discovery is happening again. Rising volumes plus tighter bid ask spreads are classic early cycle markers.
4. Capital Is Not Leaving CRE - It Is Waiting For Discipline
The narrative that ‘capital has abandoned real estate’ is not what institutional surveys show.
- In September 2025, Deloitte’s latest global CRE outlook notes that roughly two thirds of executives expect improvements in rents, vacancies and cost of capital over the next 12 months and see real estate as a continued core allocation.
- JLL data cited in the same coverage indicates global real estate dedicated ‘dry powder’ around the mid $500 billion range, near record levels.
- An early November 2025 article summarizing Ares Management commentary points to record levels of dry powder in private credit and real assets strategies, with managers emphasizing disciplined deployment into dislocation rather than a pullback from the asset class. (Alternatives Watch)
The capital has not gone. It has simply become more selective and is gravitating toward experienced, well capitalized operators with clean, conservative underwriting.
5. New Supply Is Being Choked Off In Key Sectors
In several segments, the combination of higher financing costs and lender caution is sharply limiting new construction, even as demand stabilizes.
- Drawing on CoStar data, new office construction is ‘near record lows’ and developers have added only about 8 million square feet nationally in 2025. That would be the smallest annual total since 2011.
- This limited new supply is giving landlords a rare edge in high quality buildings, with office occupancy expected to grow by around 10 million square feet over the next year.
Multifamily is still digesting a large wave of completions, but several October and November 2025 analyses from RealPage and others point to fewer new starts and a thinner forward pipeline, particularly in more constrained markets, even as demand improves. (RealPage)
Today’s buyers are not just buying a price reset. They are buying into a future environment where new competition will be limited in many locations.
6. Inflation Has Fallen and Rates Have Rolled Over
Real estate does best when rates fall after prices have already corrected.
- U.S. CPI inflation has eased back toward roughly 3 percent year over year through autumn 2025, down from the mid to high single digit peaks of 2022.
- Markets now assign a high probability to additional Fed rate cuts at the December 2025 meeting, following the initial easing moves in the fall. (Reuters)
- The 10 year U.S. Treasury yield, which approached 5 percent at prior highs, has been trading near 4 percent in late November 2025. (Trading Economics)
Historically, Cohen & Steers shows that some of the best private real estate vintages have occurred when falling or stable rates follow a substantial price drawdown, as in the early 1990s and the years after 2009.
The current set up of lower prices plus a flattening and gently declining rate environment is consistent with that pattern.
7. The Best Distress Is At The Operator Level, Not The Asset Level
A key nuance in this cycle is where the distress actually sits.
Recent commentary from Crow Holdings and others emphasizes that while headline price declines have been broad, the most attractive situations often involve fundamentally sound real estate owned by sponsors who:
- Took on too much leverage
- Underestimated capex and leasing risk
- Or lack the capital to refinance at today’s rates
At the same time, data from MSCI shows that higher quality assets in strong markets are stabilizing first, with pricing firmness strongest in logistics, necessity retail, data centers and many housing segments, even as weaker assets in challenged locations continue to struggle.
That combination creates a powerful asymmetry: good real estate owned by capital constrained sponsors.
8. The Buyer Field Has Thinned to More Disciplined Capital
Highly levered, speculative buyers have largely stepped back.
- DLA Piper’s 2025 global real estate survey and several fall 2025 conference recaps highlight that many ‘tourist’ investors have pulled back, while long term real estate specialists, family offices and large institutional managers are stepping in selectively. (DLA Piper)
- Looking at Q3 and Q4 2025 volumes, we see established firms and well known sponsors dominating larger transactions, while the number of competing bids per deal has increased mostly in sectors with strong fundamentals, not across the board.
Less frothy competition benefits disciplined players:
- Better entry pricing
- More dialogue with lenders
- Cleaner covenants and structures
- And more access to off-market or lightly marketed opportunities
This is exactly the kind of environment where multi cycle sponsors should be able to differentiate themselves.
9. Sentiment Is Still Poor - Which Is Usually What You Want
Market psychology remains gloomy even as the data improves.
- A fall 2025 sentiment piece from the Financial Times describes global commercial real estate as in a ‘tentative recovery’ with listed real estate still trading at discounts to net asset value, reflecting lingering skepticism despite improving transaction data. (Financial Times)
- DLA Piper’s and Seyfarth’s 2025 sentiment surveys both show that many respondents still rank real estate among the least popular asset classes, even as a majority expect fundamental conditions to improve over the next two to three years.
At the same time, MSCI reports that U.S. CRE prices just posted their strongest year over year gain in three years, and deal volumes have clearly turned upward from the 2023 trough.
In other words, sentiment is lagging the data. Historically, that is when early capital earns the best risk adjusted returns.
10. Early Signs Suggest The Next Cycle Has Quietly Begun
Across property types, there is mounting evidence that conditions are stabilizing and, in some cases, already improving.
- A November 2025 brief from Arbor Realty notes that the U.S. multifamily market showed ‘clear signs of stabilization’ in Q3 2025, with supply imbalances easing, rent growth tracking pre pandemic norms and investment activity picking up. (Arbor Realty)
- RealPage and others report that while construction completions are still high, new starts have slowed and leasing demand is absorbing new units more effectively than in 2023. (RealPage)
- In office, firms like CBRE, JLL and Cushman & Wakefield just reported some of their strongest leasing activity since 2019, with CoStar data showing tenants signed about 12 million square feet of deals in Q3 2025 and new office construction near record lows.
None of this will show up as ‘everything is fine’ in the headlines. But the combination of stabilizing fundamentals, recovering volumes, constrained new supply and abundant selective capital is exactly what early cycle recoveries look like.
Closing Thought
Cycles rarely turn with fanfare. They turn quietly, through a series of small but durable shifts in pricing, liquidity, capital flows and operating metrics.
Those shifts are visible now:
- Capital is ready and building dry powder.
- Sentiment is still cautious, even negative.
- Prices have corrected in the mid-teens to roughly 20 percent range from peak for many segments.
- Lenders are slowly returning and refinancing windows are opening in a more rational way.
- Distress is emerging in predictable, target rich segments, especially where leverage was aggressive.
- New supply is constrained in multiple sectors just as demand begins to recover.
That pattern is very similar to what produced strong vintages in the early 1990s and after 2009. The details of this cycle are different, but the underlying mechanics are familiar.
The opportunity now is not to assume that ‘everything is cheap,’ but to recognize that the heavy lifting on repricing has already happened - and that the next phase will reward disciplined capital willing to act before the narrative turns positive.
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If you're gearing up to raise capital as conditions shift and you want to do it with the discretion and rigor investors now demand, I partner with a small group of sponsors to design, run, and help manage their full equity capital-formation systems.
Contact me if you'd like to discuss.
Adam