The fourth quarter was characterized by post-election uncertainty, Treasury yield volatility, and the Fed’s decision to pause rate cuts, all of which contributed to a decline in the LightBox Property Listings Index to 86.8 in Q4 after three quarters of growth. The 10-year Treasury yield surged 40 basis points in December, capping off one of the most volatile periods since 2010. While higher-for-longer rates continue to shape market expectations, a bright spot emerged—big banks are ramping up CRE lending after cleaning up their balance sheets, a shift that could help drive momentum in 2025.
Key Q4 2024 Developments from the Capital Markets Snapshot Report:
- The LightBox Commercial Property Listings Index for Q4 rose 17 points higher than the Q4’23 low point to 86.8 but landed 33 points below the prior quarter.
- Market volatility, combined with the typical year-end pause, resulted in a 30% decline in Q4’s total volume of property listings compared to Q3, but a 19% uptick versus one year ago.
- On an annual basis, hospitality and industrial property listings experienced the most significant year-over-year increases in 2024, up by 18% and 16%, respectively.
- The volume of LightBox RCM private capital deals (less than $20 million) continued to grow, reaching 68% in Q4 over Q3’s 61%, with retail and multifamily accounting for 45% of the total.
- LightBox CRE Advisory Council members give CRE market conditions an average score of 62.8 in Q4 on a scale of 1 (worsening) to 100 (improving), slightly less optimistic than 70 in the prior quarter, likely a reflection of Q4’s market volatility, especially in the 10-year Treasury yield.
4Q Breaks Three Quarter Growth Streak
After Q4 2023’s three-year low, the first three quarters of 2024 saw steady growth before declining in Q4 to 86.8, reflecting a typical year-end contraction. This was a 33-point decline over the prior quarter and a 17-point increase year-over-year. As shown in the below chart, a Q3-to-Q4 drop is not uncommon. In what may be a sign of growing strength in the new year, the property listings in the last two weeks of the year—typically very slow weeks—not only bucked the quarterly downward trend but doubled in volume compared to the final weeks of 2023.
LightBox Commercial Property Listings Index (base Q1 2021=100)
“The 10-Year Treasury rate decline in Aug-Sept set a flow of transactions in motion, but then slowed again in Nov-Dec when the 10-year went back up. Nonetheless investment activity should continue at a pace exceeding Q3 and prior over the near term.”
– John Chang, National Director of Research, Marcus & Millichap
Slow Start to 2025, Busier Second Half Expected
As pricing clarity comes into focus and borrowers look for new opportunities to invest, lenders will see more demand for loans, and a new cycle of transactions and property redevelopment will get underway as some challenged CRE assets are repositioned for new uses. The speed with which those with access to debt or equity capital reinvigorate investment activity will play a significant role in how quickly dealmaking ramps up in coming quarters, but it seems unlikely that the market will bounce back as quickly as it did post-COVID.
Anticipated policy changes related to taxation, trade, immigration, and federal spending will impact certain segments of CRE with greater clarity emerging by Q2, and that will shape how the rest of 2025 plays out.
Despite ongoing challenges and rate uncertainty, the growing CRE market momentum and a wave of loan maturities are anticipated to fuel greater borrowing demand and loan originations, particularly in the second half of 2025. However, lenders and investors are expected to maintain a highly selective and cautious approach given the significant market uncertainty and the still-elevated Treasury yield.
This analysis is part of the LightBox Quarterly CRE Market Snapshot Series, which provides insight into activities that support commercial property dealmaking. The data presented in the Focus on Capital Markets and Investments are derived from the activities of the LightBox RCM platform and used to calculate the LightBox Commercial Property Listings Index. LightBox RCM is the industry’s leading go-to-market listing platform that powers investment sales, as well as debt and equity deals. As a trusted CRE technology solution, LightBox RCM offers a global marketplace for buying and selling CRE and increases the speed, exposure, and security of deals through one streamlined online platform. Brokers can leverage integrated property marketing tools, transaction management and business intelligence.
For more information about this report series or the data, email Insights@LightBoxRE.com
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