By: Head of Data Strategy at LightBox, Manus Clancy
Bullish? Bearish? It didn’t matter which side of the investment ledger you were on, there was something for you in October.
Let’s start with the bull case for investors in October. There were plenty of headlines to keep investors optimistic.
First up was a cooler-than-expected CPI report. The report itself came in 10 days later than usual as a result of the U.S. government shutdown, but it was worth the wait. The 3.0% year-over-year inflation reading was below expectations. The print sent stocks soaring (anew) and bond yields plunging with the expectation being that the Fed could go all in on rate cuts with inflation under control. (That inflation remains under control even with record-breaking tariff collections remains a mystery – but that is a topic for another day).
The yield on the 10-year fell to a 2025 low of 3.95% at one point in late October. That helped juice investors’ animal spirits once again.
The U.S. and China agreed to a one-year trade dispute truce, putting an end – for now – to what was becoming an increasingly full-throated trade war.
A peace deal was signed in the Middle East.
Bank earnings beat expectations and more broadly, more than 80% of companies announced better-than-expected earnings for Q3.
All of these contributed to the S&P 500 finishing in the green for the sixth consecutive month.
However, the tone of the market seemed less ebullient on Halloween than it was a month earlier.
Fed Chair Powell did his best to take the punchbowl away, noting that another 25-basis point rate cut in December was no sure thing. That helped erase all or most the gains on the 10-year for the month of October. The yield on the 10-year began the month at 4.16%. Following the CPI report, that bond fell to as low as 3.95%. After the Powell’s remarks, that yield surge back up to 4.11%, taking with it some of the lower-interest-rate-risk-on-euphoria.
But bears do not live by surging interest rates alone. Several U.S. companies announced meaningful layoffs in October. Market analysts were already uneasy following weak U.S. job reports in July and August. In late October, Amazon announced it would be cutting up to 30,000 jobs. Amazon was not alone. Target (1,800 positions); GM (1,700); UPS (34,000); and Nestle (16,000) all made sizable layoff announcements adding to the general uncertainty of the U.S. labor market.
The ongoing government shutdown and the prospect of SNAP benefits ending did little for investor confidence.
Lastly, JP Morgan CEO Jamie Dimon added to the underlying market angst by commenting on the recent credit defaults of Tricolor and First Brands. In unusually colorful remarks, Dimon noted that if one sees a cockroach or two, there are probably a lot more behind the scenes. The remark suggested that the recent – surprise – bankruptcies of Tricolor and First Brands might represent not one-offs, but rather an indication that lending discipline had eroded in recent months. Time will tell.
Where Does That Leave Us?
Last month we noted that the stock, bond, and CRE investors ended September in a ‘risk on’ mood.
That mood seemed to turn more cautious over the last 10 days of October. Perhaps that is not a bad thing. Prior to October, Powell and Dimon both had remarked that stocks in the U.S. appeared pricey. In addition, at times the market had appeared on the brink of irrational exuberance.
A cautious market is a better foundation than one built on irrational exuberance. Accordingly, perhaps this is the start of a healthy time out before the start of another leg up.
Inching Up, Not Racing Ahead Keeps CRE on Solid Ground
While the U.S. equity market lost some steam at the end of October, the same can’t be said for CRE.
Weekly announced sales transaction activity remained close to its 2025 highs throughout October, a sign that fluctuating bond yields; on-again/off-again trade wars; government shutdowns; or layoffs haven’t derailed the steady month-over-month improvement we’ve been seeing in the U.S. CRE markets.
Part of the reason for the steady-Eddie upticks in CRE this year has been the absence of froth. The fear in the U.S. markets is partly due to the fact that the major indexes have surged so forcefully since April 2025.
The calm we see in the CRE markets, by contrast, comes from the fact that values have inched up, not raced up, in 2025. That is a solid foundation from which a CRE recovery can continue. Should we see an equity market sell-off, an uptick in volatility, and a widening of risk premiums, the collateral damage to the CRE market should be far more limited than what we’d expect in the U.S. equity markets.
Big Deal Announcements Continue to Drive Market
One of the highlights of the sales market in October was a pair of major corporate acquisitions that reminded investors just how much dry powder remains on the sidelines.
BlackRock, NVIDIA, Microsoft, and MGX agreed to pay $40 billion for Aligned Data Centers, giving the group control of 50 facilities and a larger footprint in one of the few CRE sectors still running at full speed.
Makarora Management and Ares Alternative Credit also made headlines, taking Plymouth Industrial private in a $2.1 billion deal that underscores how industrial assets continue to attract long-term capital even amid tighter credit conditions.
Elsewhere, Remedy Medical Properties and Kayne Anderson Real Estate announced plans to pay $7.2 billion for 296 medical office properties, a bet on the durability of healthcare real estate and a sign that specialized asset classes remain in high demand.
In the office sector, SL Green Realty Corp. made the biggest splash, paying $730 million for 65 E. 55th St. in Manhattan — a rare large-ticket office deal in a market still searching for price discovery.
And in another sign of strength in the data center space, Centersquare spent $1 billion for a 10-property portfolio, while West Shore invested more than $300 million to expand its multifamily footprint in the Southeast, where population growth and job creation continue to fuel steady demand.
Taken together, these deals reflect a market where capital is increasingly selective but still active flowing to sectors with clear growth stories and long-term fundamentals rather than chasing the next rally.
The Road into Year-End
The CRE market’s been jogging, not sprinting, and that’s exactly what you want heading into year-end. Momentum’s real, but it’s running on careful footing.
If Treasury yields behave, we could cruise into December without losing pace. But one bad inflation print or a surprise Fed comment, and the wind shifts fast. The 10-year creeping back toward 5% would be like adding an uphill stretch to the run — deals get slower, and the weaker players start to breathe heavy.
Refinancing pipelines are another place to watch. Borrowers have stretched maturities as far as they can, but that rope’s getting shorter. A few high-profile workouts could test lenders’ nerves—or prove that balance sheets are sturdier than the headlines suggest.
The bright spots — data centers, industrial, medical office — are still carrying the load. The question now is whether capital starts to venture outside its comfort zone or keeps circling the same winners. For now, “selective” is the new “aggressive.”
If CRE keeps inching up the way it has, slow and steady might just win this cycle.
Stay tuned.
For more insights from Manus Clancy, subscribe to LightBox Insights and tune in to the CRE Weekly Digest Podcast, where he, along with Dianne Crocker break down real-time data, market commentary, and key signals to watch across the CRE landscape.
