By: Head of Data Strategy at LightBox, Manus Clancy
Honestly, who saw this coming in April?
It feels like only last night that we were talking about the mother of all sell offs—one that would take the markets into the worst bear market ever—or at least since 2008.
Tariffs would trigger inflation; inflation would lead to a U.S. recession; the recession would be “exported” turning 2025 into a global rout; and borrowing costs and unemployment would surge.
We won’t lie: We spent a sleepless night or two in early April pondering the possibilities.
Even since then, the headlines beyond the U.S. economy were not exactly comfortable. Air controller shortages, renewed fighting in the Middle East, civil unrest in some U.S. cities, and ‘no you are’ playground taunts between countries over tariffs dominated the headlines.
Yet here we are at the end of Q2 with both the Nasdaq and S&P 500 at all-time highs and long-term interest rates trending (slowly) lower.
An interesting tidbit in the back of my mind. A funny thing happened on the way to the depression. Inflation kept easing, and unemployment didn’t flinch—even after the much-hyped DOGE cuts.
The result? A market firmly in “risk on” mode, with investors shrugging off doom narratives.
Again, who saw any of this coming?
Too Far, Too Fast?
The “risk on” mentality is not just limited to U.S. stocks. The fixed income markets in general, and the commercial real estate markets in particular have barely missed a beat.
In April, we feared that the debt market might ‘turtle’ in the face of heightened volatility. The lending markets have had a history of doing so at various times. Certainly between 2008 and 2010, that was the case. It was also true for shorter periods during the oil bust of 2015, during early COVID in 2020, and again after the failure of Silicon Valley Bank in 2023. Remember all those predictions that 100 U.S. banks were on the cusp of failing?
During the post April 2 cycle, there has been a nary a hint of a pull back.
All four pillars of the CRE lending market are fully operational: banks, CMBS, non-banks/PE, and insurance companies. In addition, capital has been available not just for stabilized assets. Headlines abound of developers getting financing for both ground up construction and the never-easy office to residential conversions.
As we noted on our recent episode of The CRE Weekly Digest, if the CRE market was this resilient in the face of so much adversity in Q2, what’s to stop it from putting up impressive sales and refinancing numbers in Q3 and Q4?
Certainly, markets and events can turn on a dime. Tariff threats could turn heated once more and the final agreed upon levels may be punitive. The impact to retailers could be meaningful. Inflation could move higher. The Big Beautiful Bill could disappoint and the prospect of more unrest domestically or globally is out there.
But considering how much bad news and volatility the CRE markets shrugged off since April, it’s hard to picture CRE going bearish in the near term. Accordingly, we think transaction activity surprises to the upside in H2.
Big Deal Announcements Remain Plentiful
The market saw a wide swath of big sales in June.
The apartment market continued to lap other property types.
On the portfolio side, there were two announced sales of more than $500 million including a collection of eight-properties in Atlanta of a little over 2,000 units acquired by Equity Residential.
On the single-asset side, big apartment sales were announced in Washington D.C. (2); Boca Raton; Belmont, MA; Seattle, WA; Mill Creek, WA; Fort Lauderdale, FL; Salt Lake City, UT; Anaheim, CA; and Philadelphia, PA. The buyer pool reveals very few repeat buyers across the apartment segment last month, underscoring how broad the field of active buyers has become.
In the industrial segment, a three-property Ohio portfolio sold for almost $200 million, and a Las Vegas Logistics Center sold for $175 million.
In the office segment, Apple paid $350 million for a two-property complex in Sunnyvale, CA. Earlier in the month, Apple paid almost $170 million for three buildings in Cupertino. After two lackluster years in 2023 and 2024, when big tech firms were downsizing space and letting leases expire, the tech bid is back. The major AI players have been buying and leasing space in droves in 2025 in a bullish sign for Class A offices in major tech hubs.
In the retail space, a three-property portfolio in Oklahoma traded for over $200 million. In Florida, Swire sold a stake in a Brickell City Center property for $1,000 per square foot to Simon. In the Bay Area, TMG Partners paid $121 million for the Metreon Mall. In North Carolina, the Crabtree Valley Mall sold for nearly $300 million.
We can’t recall a month where there were so many nine-digit retail sales… another bullish sign for the CRE market.
Does this mean we’re in the clear? Of course not. But if the last quarter taught us anything, it’s that this cycle doesn’t want to follow the script. It rewards adaptability, not doomsaying. And for now, the capital is moving. The market’s talking. And commercial real estate, against all odds, is listening.
For more insights from Manus Clancy, subscribe to LightBox Insights and tune in to the CRE Weekly Digest Podcast, where he, along with Martha Coacher and Dianne Crocker, shares real-time data, market commentary, and key signals to watch across the CRE landscape.
