Rate cuts through a CRE lens

The U.S. economy has reached what many believe is a crucial turning point - the first interest rate cut in over four years came in at a half-percentage point, following 11 rapid rate hikes between March 2022 and July 2023.¹ This shift towards a lower-rate environment, after hitting a 23-year high,² signals the start of a new economic loosening cycle, and we view it as a positive shift for the commercial real estate (CRE) industry going forward. 

Here are some of the effects we anticipate for the commercial real estate market:

• Lower borrowing costs: Many lenders price debt to a spread over key benchmark rates such as SOFR and the 5-year Treasury. Declines in Treasury rates and corresponding cuts to SOFR could directly affect borrowing costs, potentially making commercial property financing more accessible.
• Increased property values: With borrowing becoming more affordable, demand for real estate is likely to rise, potentially driving up some property values.
• Higher transaction volumes: As demand increases, more sellers may enter the market, potentially boosting real estate transaction activity.

Coming Soon: Keep an eye out for the replay of our recent H2 2024 Outlook webinar for more of CrowdStreet’s insights on the effects of a rate cutting environment on CRE and which two sectors might be most affected.

In the News:

Offering Highlight - The Georgian

The Georgian, a former CrowdStreet offering, has received the prestigious MICHELIN Key, one of the highest honors a hotel can achieve. Brought to CrowdStreet by BLVD Hospitality in 2022, the project raised more than $9 million, which helped enable the sponsor to restore this historic property to its original grandeur. Built in 1933 and often called “Santa Monica’s First Lady,” The Georgian is one of L.A.’s most iconic hotels and truly a piece of history that CrowdStreet investors helped revitalize. 

Your Investment's Performance at a Glance

Many CrowdStreet investors have requested additional insights into the ongoing performance of their investments, and with our new Project Status Reports, we aim to provide investors with a one-stop shop for a standardized quarterly snapshot of a given investment’s status. These reports provide essential data to help you better understand your investments and track their performance.

Where to find the reports:

• Log in to your CrowdStreet account.
• In the top navigation bar, select Portfolio.
• From your list of investments, click on the specific investment you want to view.
• On the investment’s page, locate the right-hand column of modules and click on the Project Status Reports tab.
• If a report is available, it will be listed under this tab.

Questions? Schedule a call with our Investor Relations team.

On the Blog:

Boston Multifamily Market Overview

Explore some key statistics and developments in the Boston and Woburn multifamily real estate markets.

Growing Opportunity in Healthcare Real Estate

Explore opportunities inpatient rehabilitation facilities present in healthcare real estate.

Light and Middle-Market Industrial CRE

Learn about some of the unique characteristics of these industrial commercial real estate subtypes.

Positive Industry News:

Fed Pivots: The Next Chapter for CRE

Cushman & Wakefield shares some of the green shoots they're already observing in the market.

The Commercial-Property Market is Coming Back to Life

The Fed's first rate cut in four years is bringing some clarity on where valuations stand.

*These headlines are not inclusive of all industry news, we encourage all investors to consider a variety of available real estate news channels as they conduct their due diligence ahead of investing.

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