Multifamily housing leads in October

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and emerging opportunities for real estate investors, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. become a member to receive future editions straight to your inbox.

July marked a turning point in commercial real estate competition; bids increased for the first time in more than a year. This trend continued in October.

According to JLL’s Global Bid Density Index, bidder dynamics during the month saw the second highest monthly gain in the past year. Competitiveness continues to increase, due in part to interest rate cuts by the US Federal Reserve September And October.

The index measures bidding activity to provide a real-time view of liquidity and competitiveness in private real estate capital markets. This is an indicator of future capital flows in investment sales transactions.

“As capital deployment accelerated in the third quarter, institutional investors are signaling increased confidence in the market despite continued uncertainty,” said Richard Bloxam, JLL capital markets CEO. “We expect business confidence will continue to improve, paving the way for continued growth in capital flows in 2026.”

Of all commercial real estate sectors, multifamily housing led the competition with the strongest bidding activity. This is due to housing shortages in most major markets. Rental housing rates are still high, but with the for-sale housing market so expensive, more tenants are expected to rent again next year.

JLL estimates there is a 3.5 million housing shortage in the United States. This, along with near-record high home prices, is keeping renters in place longer and will likely lower multifamily vacancy rates even further once all the new supply is completed. All of this ensures continued strong belief among multifamily investors.

With the trade policy uncertainty decreasing slightly, there was a significant recovery in the tender competitiveness of the industrial and logistics sector.

There was some softening of competition for retail properties because the number of properties for sale was greater, so buyers had more choice. But there were more deals on the market. Investor demand, at least for now, is driven by an increase in consumer and retail spending.

The office sector is also in the process of recovery, with bid dynamics expected to rise from all-time lows in late 2023. Investor sentiment is improving with expanding bidder pools and increased lender participation.

Near-term interest rate cuts are still out of the question, especially considering Stronger than expected employment numbers in SeptemberReleased late due to government shutdown. But investors appear less sensitive to timing as they expect rates to fall further next year.

“While market uncertainty continues to influence decision-making processes, the growth outlook looks more positive for 2026. Having weathered various periods of uncertainty in the past year, more investors have a higher tolerance for risk,” Bloxam said. he said. “Combined with exceptionally strong debt markets, we expect this to catalyze continued improvement in liquidity.”