Our take on the news that matters in commercial real estate and property data intelligence.
The Weekly LightBox Perspective
In this week’s Signal, the leading stories point to a CRE market beginning the year with clearer signals than it had a few months ago. Debt capital conditions are improving, as reflected in recent bank earnings, while policy momentum is increasingly focused on unlocking supply, all against a macro backdrop that remains mixed but manageable. “What stands out so far in January is the consistency across the data,” said Dianne Crocker, research director at LightBox. “Banks are on solid footing, capital is ready to move, and deals continue to close. While 2026 isn’t necessarily shaping up to be a record-breaker, the momentum is palpable, supported by price stabilization, healthy fundamentals, and a reassuring dose of caution.”
TOP STORY: December CRE Activity Index Ends 2025 on Stronger Footing
The LightBox CRE Activity Index declined 13% in December, closing at 86.9, reflecting a typical year-end slowdown rather than a loss of momentum. Importantly, the December pullback was far milder than the sharp post-election drop seen one year earlier. Activity levels remained 49% higher than in December 2024, underscoring how much the market has recovered over the past year. Key components of the Index held up extremely well on a year-over-year basis: listing activity rose 55%, Phase I ESA volume increased 48%, and appraisal activity climbed 41%. Deal execution also remained active, with $100M+ transactions up 44% month over month, signaling continued investor engagement despite seasonal pauses.
LightBox Take: The good news is that December’s Index decline appears calendar-driven, rather than a sign of structural concern. Historically, the January Index delivers a 40–50% increase in activity as listings, underwriting, and due diligence reaccelerate after the holidays. “While broader macro uncertainty certainly remains, particularly around labor markets and rates, LightBox metrics point to steady, selective momentum,” said Manus Clancy, head of Data Strategy at LightBox. January’s CRE Activity Index will be the market’s first sign of how Q1 deal flow is likely to take shape.
Inflation Holds Steady as Beige Book Signals Mixed but Stable Growth
Last week’s inflation data showed continued stabilization as 2025 closed. December CPI rose in line with expectations, reinforcing the view that inflation is easing gradually rather than reaccelerating. Producer prices posted modest gains, suggesting limited upstream pressure on costs. The Federal Reserve’s Beige Book described overall economic activity as mixed, with several districts noting that commercial real estate conditions remain uneven. Contacts reported improving activity in industrial and retail, while office leasing and development remain subdued in many markets. Construction activity was described as “cautious,” with projects proceeding selectively amid high costs and financing considerations.
LightBox Take: The inflation reports don’t give the Fed what it needs to make another rate cut decision at this month’s meeting, and futures markets now price a 95% probability of no change. For commercial real estate, contained inflation supports more predictable underwriting assumptions and reduces the risk of sudden cost shocks. The Beige Book’s note of moderate price growth and tariff-related cost pass-through highlights ongoing cost pressures, but not at levels that would derail investment plans.
NY Moves to Accelerate Housing by Streamlining Environmental Review
New York Governor Kathy Hochul proposed reforms last week to the State Environmental Quality Review Act (SEQRA) aimed at speeding up housing development and lowering construction costs. The changes would exempt most housing projects on previously developed land from lengthy environmental reviews that can add an average of two years and significant expense. The proposal is part of Hochul’s broader “Let Them Build” agenda, launched amid a statewide housing shortage estimated at roughly 800,000 units. While the reforms would not eliminate environmental protections, they seek to curb delays and lawsuits that have stalled housing with little environmental impact. Similar reforms in California have already shortened development timelines significantly.
LightBox Take: “The proposed SEQRA reforms signal growing political momentum to remove structural barriers to housing production, particularly in high-cost, supply-constrained markets like New York,” noted Crocker. For developers and lenders, faster and more predictable permitting improves project feasibility, reduces carrying costs, and supports capital deployment into both market-rate and affordable housing. Importantly, streamlining reviews does not eliminate the need for environmental due diligence, site risk, contamination, and resilience will remain critical underwriting considerations.
Institutional Capital Builds as Dry Powder Seeks Home in North American CRE Markets
After years of accumulating capital amid higher rates and limited deal flow, institutional investors are becoming more confident about deploying dry powder. Global private real estate fundraising rebounded in 2025, with $164 billion raised through Q3, surpassing all of 2024, according to PERE. Nearly $115 billion is targeting North America, where strategies are seeking more than $200 billion in deployable capital. Opportunistic and value-add funds continue to dominate fundraising, but interest in core and core-plus strategies has begun to reemerge as investors prioritize income and stability.
LightBox Take: The growing stockpile of institutional capital reinforces expectations for a more active CRE market in 2026. While true distress remains concentrated largely in office, loan maturities in 2026–2027 are expected to bring more assets to market, creating deployment opportunities across sectors. LightBox data already shows rising transaction activity and narrowing bid-ask spreads, particularly in retail, industrial, and select office assets priced below replacement cost.
Big Banks Hit Reset on Expectations for the Fed’s Next Rate Move
Major banks are recalibrating their interest rate outlooks, increasingly signaling a longer pause before any additional easing. J.P. Morgan now expects the Fed’s next move to be a rate hike in 2027, withdrawing expectations for near-term cuts. Goldman Sachs and Barclays have pushed their rate cut forecasts to mid-to-late 2026, citing a labor market that is slowing but not deteriorating rapidly. Q4 bank earnings out last week point to a constructive, but disciplined, year for CRE lending. While expectations for rapid rate cuts have largely faded, large banks reported solid balance sheets, steady loan demand, and growing refinancing activity, suggesting lending capacity remains intact.
LightBox Take: For CRE, rate stability matters more than outright cuts: predictable financing benchmarks support underwriting, narrow bid-ask spreads, and enable borrowers to address upcoming maturities. LightBox data already reflects this dynamic, with lending markets active and deal flow strengthening late in 2025.
Did You Know?
Data from the LightBox RCM platform shows that buyer engagement was up in 2025. The average number of viewed agreements across all property listings climbed from 118 in 2024 to 157 in 2025, led by multifamily with a 209 average followed by industrial and retail. The biggest year-over-year gains in buyer interest were for land, multifamily, office, and healthcare assets.
THE WEEK AHEAD
WEDNESDAY Construction spending
THURSDAY PCE Index
