After Months of Slump, Real Estate Bidding Finally Shows Signs of Life

For the first time this year, there’s a bit of good news in commercial real estate. After months of sluggish deal-making, JLL’s global Bid Intensity Index ticked up in July — its first improvement since last December.

The index, which tracks how many bids properties are attracting and how competitive the offers are, is basically a pulse check on liquidity in private real estate markets. And according to JLL, the pulse is starting to beat a little faster again.

So what’s driving the shift? Capital is flowing back, bidding dynamics are leveling out, and investors are beginning to re-enter the fray after sitting on the sidelines earlier this year.

“With no shortage of liquidity, institutional investors are returning to the market with more capital sources and a renewed appetite for real estate,” said Ben Breslau, JLL’s chief research officer.

What the Index Looks At:

• Bid-Ask Spread: How close the winning bid comes to the asking price.

• Bids Per Deal: Average number of buyers making offers.

• Bid Variability: How different the final offers are from each other.

Right now, the biggest bright spot is the “living” sector — think multifamily apartments, student housing, and senior living. Bidding in that space is heating up as demand stays strong and valuations hold.

Retail has shown flashes of improvement compared with last year, but tariffs are dragging it down again. Industrial isn’t faring much better thanks to ongoing supply chain headaches. Offices, surprisingly, are showing some resilience. With more companies pushing return-to-office, demand is ticking up, and lenders are starting to get more comfortable financing deals. Some investors are even calling a bottom to the office market and bargain hunting while prices remain low.

In short, the market is adjusting to a new reality: uncertainty is the norm. Investors are getting used to higher risks and higher borrowing costs — and they’re moving forward anyway.

“The attractiveness of commercial real estate as a long-term store of value remains intact,” Breslau added. “As more investors move to a ‘risk-on’ mode, we expect capital flows to keep growing in the second half of the year.”

The original story by Diana Olick for CNBC.