Multifamily housing leads in October

The commercial real estate market has witnessed a significant shift in recent months, with bidding activity increasing for the first time in over a year. According to JLL’s Global Bid Intensity Index, July marked a turning point in competition for commercial properties, with bids rising and continuing to climb into October. This upward trend is largely attributed to interest rate cuts by the U.S. Federal Reserve in September and October, which has improved competitiveness in the market.

Market Trends and Insights

The JLL Global Bid Intensity Index provides a real-time view of liquidity and competitiveness in private real estate capital markets, serving as an indicator for future capital flows across investment sales transactions. As capital deployment accelerated during the third quarter, institutional investors have signaled increased confidence in the market, despite persistent uncertainty. Richard Bloxam, CEO of capital markets at JLL, notes that “business confidence will continue to improve and pave the way for continued capital flow growth into 2026.”

The multifamily housing sector has led the way in competition, driven by severe housing shortages across major markets. With rental vacancy rates still high, more renters are expected to re-lease in the coming year due to the expensive for-sale housing market. JLL estimates a shortage of 3.5 million housing units in the U.S., which, combined with near-record-high home prices, is keeping renters in place for longer. This is likely to push multifamily vacancy rates lower once new supply enters the pipeline, driving continued strong conviction among multifamily investors.

Sector Performance

The industrial and logistics sector has also experienced a significant rebound in bidding competitiveness, as trade policy uncertainty has settled slightly. In contrast, the retail sector has seen some softening in competition due to an increase in available properties, giving buyers more choice. However, investor demand is being driven by a rise in consumer and retail spending, with more deals entering the market. The office sector is well into recovery, with bid dynamics rising from all-time lows in late 2023, as investor sentiment improves with expanding bidder pools and increased lender participation.

Near-term interest rate cuts remain uncertain, particularly in light of stronger-than-expected employment figures for September. Nevertheless, investors seem less sensitive to the timing, as they still expect rates to come down further next year. As Bloxam notes, “while market uncertainty will continue to impact decision-making, the growth picture is looking more positive for 2026.” With investors showing a higher tolerance for risk and exceptionally strong debt markets, continued improvement in liquidity is expected.