12 CRE Takes About The Fed's Last Rate Cut Of 2025

The Federal Reserve cut interest rates by 25 basis points Wednesday, the third consecutive meeting where monetary policy was loosened. 

Despite the trend, there’s a wider-than-usual range of opinions inside the Fed about the best path forward as central bankers grapple with their dual mandate of price stability and maximum employment. 

The 43-day government shutdown left both Fed officials and market watchers without the full buffet of official data they typically have before the Federal Open Market Committee votes. 

Still, investors were confident by the start of the week that the Fed would cut rates, but there is a broad set of perspectives about what it means and where markets are headed. Here are some that have landed in the inbox at Bisnow.  

Responses have been edited for length and clarity. 

Marlon Jones, executive managing director of U.S. capital markets at Avison Young: This third cut of the year is the most significant for real estate investors. In an era of prolonged volatility, it signals directional conviction. Second, it creates additional liquidity in the system, not just for problematic refinancings or exit strategies, but for new developments and buoyed tenant demand-side fundamentals. 

As we move into 2026, this sets the stage for more capital deployment, kick-starting development pipelines and leasing activity that reflects renewed confidence in growth.

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Seth Niedermayer, real estate practice partner at Herbert Smith Freehills Kramer: Today’s rate cut signals that we’re clearly still in a cutting mode. With this, I’d expect a relatively orderly recovery — refinancings that pencil, transaction volumes picking up and capital moving back into traditional asset classes. 

It won’t be 2019 again, but the $900B-plus of maturing loans will seem less daunting, and it will give both buyers and sellers confidence to transact. For well-capitalized investors, 2026 may be remembered less as a crisis year and more as the vintage when they locked in yields that looked impossible two years earlier. 

2026 should be a year of sorting, where quality assets and patient capital come out ahead.

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Uma Moriarity, senior investment strategist at CenterSquare: The interest rate cut is in line with market expectations, but it doesn’t determine the long end of the yield curve, which is the more important consideration for commercial real estate. That 10-Year Treasury yield is determined by market forces and remains range-bound. However, that stability on the long end of the yield curve should help the CRE transaction market continue its recovery.

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Garret Weyand, partner at Cedar Street Partners: A 25-basis-point cut may sound small, but on a $40M construction loan, it adds up fast and can save seven figures over the life of a project. It’s a clear signal that inflation is easing. Lending channels can start to reopen, and if mortgage costs come down, too, buyers suddenly have more purchasing power. That combination is exactly what this market needs to start moving again.

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Michael Lee, partner at HKS Real Estate Advisors: Today’s 25-basis-point cut was widely expected, so the bigger story is what the Fed signals about the months ahead. Recent data shows a cooling labor market, and this move reflects a continued risk management approach.

For commercial real estate, the cut offers only modest relief. Short-term benchmarks will dip, but long-term rates remain elevated, and spreads haven’t narrowed enough to materially change lending conditions. If the Fed leaves the door open to further easing in early 2026, we could see more stability in the Treasury curve and a gradual improvement in liquidity and refinancing options.

Ultimately, a single cut helps at the margins, but clarity and stability in long-term rates are what will truly unlock capital and deal flow.

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Ronald Dickerman, founder and president of Madison International Realty: While the Fed's rate reductions are a positive signal for commercial real estate markets, markets should recognize that continued deficit spending across developed economies, including the U.S., creates a natural floor on how low rates can realistically go. 

Real estate owners are in need of liquidity solutions while growth remains fleeting and highly differentiated across sectors. These rate adjustments provide some relief, but investors will need sophisticated strategies to generate alpha amid a fragile market landscape.

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Alex Pette, president and director of research and ETFs at Hoya Capital Real Estate: Today's decision to cut interest rates by 25 basis points is clearly warranted by the trajectory of both employment and inflation data, and we think we're still 75 to 100 basis points above neutral. 

With no ability to control tariff-driven inflation, the Fed has instead relied on the one lever it can pull — real estate and credit markets — which have borne the brunt of this tightening cycle. Beneath the surface of the AI-driven market boom, the reality on Main Street has looked far less robust for many months, with the middle market increasingly squeezed by elevated financing costs. And all of this is happening with near-peak employment. 

But this ultra-blunt transmission strategy tends to work until it suddenly doesn’t, and the accumulation of stress across household and credit channels suggests that the balance of risks is now tilting decisively to the downside. 

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Scott Hensley, principal at Corfac International: The timing of these rate cuts is good news not only for developers and CRE buyers acquiring assets but also for any CRE owners whose last financing was between March 2020 and April 2022, when the federal funds rate was near zero. Even though a renewal rate will be more than their current interest rate, it will be less painful than it was 6 or 12 months ago. We are seeing regional lenders now quoting rates in the high-5%-to-low-6% range.

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Alex Redfearn, founder and CEO at Redfearn Capital: A 25-basis-point cut is helpful, but what matters for owners is where long-term rates settle. Industrial demand in the Southeast remains strong, yet elevated debt costs are still shaping valuations and slowing transactions. If the Fed signals more easing or even a stable rate environment heading into 2026, we’ll see more capital come off the sidelines. For now, this cut moves things in the right direction.

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Alyssa Soto Brody, co-founder at Powered by DMT: A 25-basis-point cut will act as a psychological boost more than anything else. Our projects on [New York City’s] Roosevelt Island have seen a robust surge in new contracts being sent out, and our team all over New York and Miami are experiencing the same momentum. Buyers aren’t waiting for dramatic rate cuts — they’re acting now, and even a modest adjustment from the Fed will only accelerate the pace.

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Jay Roberts, CEO at Prosper Group: As rates come down, Miami and the broader Florida market will accelerate faster than anywhere in the country. Transaction volume is directly correlated to the cost of capital. Lower the cost of money, and liquidity rushes back in. 

The macro backdrop is aligning for a breakout year in 2026. The combination of increased U.S. tariff revenue, a surge in foreign investment into American assets and a lower-rate environment is boosting capital inflows, especially into hard assets such as real estate. 

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Ryan Severino, chief economist at BGO: People root for the Fed to cut rates in the hopes that those cuts will ultimately impact CRE in a positive way, but reality is more complicated. Cap rates, valuations and returns are not a function of simply one factor (interest rates), and consequently, history has demonstrated that CRE returns can fare well, even in a higher-rate environment. 

CRE does not explicitly need very low interest rates to generate solid performance. It will likely require investor savvy and skill that might not have been needed in more recent periods, but possibilities still abound for CRE returns.