Commercial Real Estate Market Report: Q4 2024

The final quarter of 2024 provided a level of clarity on certain fronts with the conclusion of the Presidential election and relative stability in key economic indicators. The Federal Reserve (the Fed), noting the continuing stabilization of inflation and jobs data, proceeded with a measured pace of target rate reductions, bringing the Fed funds target rate down twice in the quarter.

Investors have a long runway to gain confidence in the direction of the economy and capital markets and to prepare for the deal environment. We anticipate significant increases in transaction volume and, with continued improvement in borrowing costs, increases in development activity later in the year.

With election uncertainty in the rearview and economic data trending favorably, 2025 should be a year of growth and renewed activity. The new administration has promised changes, and it will remain to be seen what potential tariffs and policy changes could mean for the economy. However, from our vantage point today, conditions appear favorable for a solid year for the economy as a whole and commercial real estate specifically.