CRE Activity Index Retrenches in October: LightBox
LightBox, a commercial real estate (CRE) information and technology provider, revealed a slight decrease in market activity after a strong September, according to its monthly CRE Activity Index. The Index ticked down 2.3 points in October to 95.9, but still well above 79.7 one year ago, following a “bullish” 8.3-point rise in September.
The firm’s monthly CRE Activity Index showed that October’s minor decline corresponds with historical patterns, as the Index typically weakens following a robust recovery from August to September. The report cited US election uncertainty and the rally in 10-year yields as contributing to investors’ “wait-and-see” approach.
The index measures the aggregate level of activity in commercial property listings, environmental due diligence, and appraisals.
Lightbox reported a 5% increase in the average daily volume of environmental due diligence activities, potentially indicating the initial phase of underwriting for transactions anticipated to conclude by year-end. Lenders’ appraisal activity month over month was stable, and property listings declined 5% after the 18% rise over August, “a sign of an expanding universe of available properties.”
“Our Index performance this month reflects both typical seasonal adjustments and broader market dynamics as stakeholders balance opportunities with election-related uncertainties,” said Manus Clancy, LightBox head of data strategy. “Investor confidence remains strong, but caution is prevailing as they anticipate both economic and political shifts in Q4.”
Following a sluggish start to 2024, some investors are proactively seeking opportunities, while others are postponing their actions until interest rates fall further, according to the report.
“These signs of traction starting to build could contribute to a strong finish to 2024 as the market establishes a new normal that will eventually stabilize at levels closer to 2019 levels. Overall, the market is showing a growing intention to transact, and CRE professionals are exhibiting more optimism than they’ve shown in several years, ” Clancy said.