Commercial real estate bidding posted its strongest monthly improvement in a year in June, according to JLL, even as broader economic uncertainty and market volatility persist. Far from deterring investors, the volume of active capital circulating in the market appears to be working against the headwinds, pushing competition higher.
Lauro Ferroni, JLL’s head of Capital Markets Research for the Americas, attributes the momentum to a straightforward logic: investors like what real estate has delivered. ‘They want to increase their real estate books. In some cases, they can generate more of a yield there,’ Ferroni said. ‘They’ve seen how the sector has played out. There was not a big wave of distress or defaults or anything like that. So they’re coming back into the sector.’
Why Commercial Real Estate Bidding Is Rising
A key part of the story is who is doing the bidding. Private capital investors accounted for 66% of winning bids across JLL transactions in the first quarter of 2025, underlining just how dominant non-institutional money has become in the current cycle. That weight of private capital is one reason competition has held up despite the macro noise.
Credit conditions have also shifted considerably. Commercial mortgage-backed securities (CMBS) (pooled loan products sold to investors) along with insurance companies, government agencies and debt funds are all lending more freely than they were in the years immediately following the pandemic. Higher interest rates from 2022 onwards had put a chill on lending activity, but that freeze is thawing. Yahoo Finance reports that JLL’s Credit Intensity Index remains materially elevated, with lenders now pushing harder than buyers to place capital. In other words, the money is looking for a home.
Retail and Industrial Lead the Way
Not all property types are benefiting equally. Investors are flooding into retail and industrial assets, while other sectors lag behind.
Retail’s resurgence is the newer development. During the pandemic, the growth of e-commerce battered the sector, making it one of the worst performers. Now, according to JLL, owners like the returns they are getting and have little interest in selling, which is itself driving up competition among buyers chasing a limited pool of available stock.
Industrial property has been a strong performer for several years, powered first by the e-commerce boom and more recently by reshoring and reindustrialisation. Companies are moving or expanding manufacturing closer to the United States to shorten lead times, reduce supply-chain risk and, in some cases, reduce tariff exposure. A midyear report from CBRE shows manufacturing leasing was up 27% year over year, underlining the scale of that structural shift.
Multifamily housing (residential blocks with multiple units) remains the weakest sector for both bidding and credit activity. The segment is still working through a historic wave of new construction. Vacancies are falling nationally, but that movement is largely driven by newly built properties. Stabilised vacancies, which strip out properties still in the process of filling up, were up 34 basis points in the second quarter of this year, according to CoStar.
Ferroni does not see any major warning signs for competition in overall commercial real estate (CRE). He also pointed to the US Treasury Department’s move last week to buy long-term bonds as a potential support for those currently working on property transactions, boosting confidence that buyers can be more competitive in their bidding.
‘There’s quite a bit of gas left in the tank for further growth, and we think it’ll be gradual, not explosive momentum,’ Ferroni said. ‘It doesn’t appear to be frothy at all.’ With private capital dominant and lenders actively hunting for deals, the conditions for continued, steady growth appear firmly in place.
