After years of uncertainty, many in the commercial real estate sector believe the market may finally have reached a turning point. A new CBRE survey suggests that capitalization rates could have peaked in the first half of 2025, even as Treasury yields showed sharp volatility and investors weighed ongoing risks in U.S. fiscal and trade policy.
According to CBRE, more than 200 of its professionals, primarily brokers, participated in the survey conducted in early June. Their responses reflect conditions from the first five months of the year and are intended to provide “real-time market estimates.” Because they were brokers rather than investors, CBRE cautioned that the results may not fully reflect broad market sentiment.
Treasury yields, a key foundation for rate expectations, swung widely in early 2025. The 10‑year note climbed to 4.79% on January 13, then eased to 4.01% by April 4, before ending the first half of the year at 4.24%. Despite that volatility, the all‑property cap rate edged down nine basis points to 6.84%. Notably, rates across different property types moved in tandem, a departure from prior surveys and one possible indication that cap rates are leveling off and the market is entering a phase of yield compression.
Survey responses underscore that outlook. In a similar CBRE survey conducted for the second half of 2024, the share of respondents expecting no movement in cap rates was lower across most property types. By contrast, in the first half of 2025, responses signaling an expectation of no change rose markedly: 67.1% for central business district (CBD) office, 70% for suburban office, 67.4% for retail, 73.8% for suburban multifamily, 64.5% for industrial and 50% for hotel.
Broadly, yields have held steady and median changes across property categories were minimal. However, the data also revealed widening spreads between respondents’ low and high estimates. Properties in Class B and C categories, in particular, continued to see cap rates expand well beyond the median.
Another concern reflected in the survey is the impact of trade policy. CBRE reported that 57% of capital markets and valuation professionals lowered their expectations for overall 2025 deal volume slightly because of tariff pressure, while 16% cut their forecasts significantly. Only 3% said their outlook had improved, and 24% saw no meaningful change.
Together, the findings highlight both growing confidence that cap rates may have peaked and lingering uncertainty from economic and policy headwinds, which could still weigh on real estate transaction volumes through the rest of the year.
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