Behind the scoreboard: two markets, two playbooks, and one lesson in balance
A steady sentiment index signals the return of balance in commercial real estate. Here’s why cautious optimism is giving owners and managers a chance to plan with confidence again.
After two years of volatility, commercial real estate confidence is beginning to steady. The Real Estate Roundtable’s Q4 2025 Sentiment Index held at 67 — unchanged from Q3 — as leaders reported improving fundamentals and renewed access to debt capital.
According to the survey, 63% of respondents say market conditions are better than a year ago, and 70% expect continued improvement in 2026. Asset values are recovering too: 42% of CRE executives reported increases, while 72% anticipate further gains next year.
The significance of stability
A flat reading might not sound exciting, but after years of rapid swings, consistency is exactly what the market needs. As one executive said, “The wind isn’t at your back or your face this time — it’s going sideways.”
That equilibrium gives owners, operators, and asset managers a rare opportunity: time to recalibrate assumptions, revisit expense timing, and align forecasts with emerging data rather than reacting to crisis.
Capital loosening, confidence rebuilding
Debt capital availability has improved dramatically — 78% of survey respondents said borrowing conditions have eased. Banks and private credit lenders are reentering the market with more flexible terms, even as equity remains cautious.
With that shift, transaction pipelines are expected to accelerate in early 2026. But “cautious optimism” still rules the day — political uncertainty, rate cuts, and policy volatility remain on executives’ minds.
How reforecasting builds on this momentum
A stabilizing market doesn’t mean it’s time to coast. If anything, it’s the moment to put reforecasting discipline to work:
✅ Run new scenarios based on changing cap rates and debt terms.
✅ Reassess NOI sensitivity to occupancy and rent growth.
✅ Refine portfolio-level assumptions as liquidity improves.
At Kardin, we help CRE teams turn sentiment into strategy. Our tools make it easy to test assumptions, model new lending environments, and see portfolio impacts clearly — so you can move from feeling confident to being prepared.
Because when sentiment steadies, visibility becomes your competitive edge.
