CREFC's 1Q 2025 Sentiment Index Shows Steep Decline Amid Rising Tariff and Market Uncertainty
- Editor
- Apr 23
- 1 min read
Whats Happening:
The CRE Finance Council's Q1 2025 Sentiment Index plummeted 30.5% to 87.9 from 126.6 in Q4 2024, marking the second-largest drop on record. This decline, triggered by President Trump's "Liberation Day" tariff announcements, reflects growing concerns over economic uncertainty and market volatility in the $6.2 trillion commercial and multifamily real estate finance sector.
Key Moves:
Sentiment Index fell 30.5% to 87.9 from 126.6 in Q4 2024
80% expect worse economic conditions over the next 12 months, up from 12% last quarter
59% expect negative impacts from government actions, up from 2% last quarter
By The Numbers:
30.5% decline in Sentiment Index from Q4 2024 to Q1 2025
87.9 Sentiment Index value, below the baseline of 100
80% of respondents expect worse economic conditions, up from 12% last quarter
Key Quotes:
"The CRE finance industry finds itself at a genuine crossroads. The dramatic drop in our Sentiment Index clearly signals concern, but beneath the headline numbers we see pockets of cautious optimism," - Lisa Pendergast, President and CEO of CREFC
"What makes this quarter's survey particularly revealing is the stark contrast to last quarter's record high sentiment, demonstrating how quickly market psychology can shift with changing economic policies."
Bottom Line:
The sharp decline in CREFC's Q1 2025 Sentiment Index reflects significant concerns in the commercial real estate finance sector due to recent trade policies and economic uncertainty. While the overall outlook has deteriorated, there are still pockets of cautious optimism, particularly regarding how lower interest rates might impact transaction activity.
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