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Q325 Burns + CRE Daily Fear and Greed Index
The index signals cautious optimism this quarter, though muted deal flow shows the math still doesn’t pencil.
Jordan B.
September 16, 2025
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Good morning. Thank you to everyone who contributed to the Q3 2025 Burns + CRE Daily Fear and Greed Index. This quarter’s report reveals sentiment holding steady, with investors cautiously optimistic but still constrained by tight capital and elevated rates.
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🎙️This week on No Cap: Season 4 opens with Owen Thomas, Chairman & CEO of BXP, on leading through crisis, the future of offices, and how AI and gateway cities are reshaping CRE.
Market Snapshot
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Investor Sentiment
Q325 Burns + CRE Daily Fear and Greed Index
The latest Q3 2025 JBREC + CRE Daily Fear and Greed Index is in, offering a fresh look at investor sentiment across 800 sector responses from over 400 investors.
By the numbers: The Fear & Greed Index held at 56 in 3Q25, signaling sentiment that’s modestly expansionary but still cautious. Industrial led the pack and is expected to notch the strongest value gains, while multifamily stands to benefit most from potential Fed cuts.
For context: Index values below 45 indicate a contracting commercial real estate (CRE) market, while those above 55 suggest expansion. Values between 45 and 55 reflect a market that is balanced between buyers and sellers.
The investment freeze: Roughly 71% of investors left their commercial real estate exposure unchanged last quarter—the highest “pause” rate in two years. Elevated long-term interest rates keep deal math tough, and more investors still see capital access tightening (26%) than easing, even if that share is shrinking.
Cap rates vs. reality: Today’s cap rates aren’t high enough to justify aggressive buying. Investors say they’d need a 70–110 basis point rise—roughly a 10–15% value drop—before capital flows meaningfully. Yet, no sector is expected to lose ground over the next six months, which leaves transactions stuck in limbo unless rates break lower.
Sector Check-In:
Multifamily: Growth slowed, but 56% of investors see it as the biggest winner if the Fed cuts, thanks to its reliance on short-term debt.
Industrial: Still the outperformer; investors expect a 3% gain in asset values through early 2026.
Retail: Sentiment slipped the most this quarter, pressured by trade policy and goods inflation concerns.
Office: Remains the weakest sector, but no longer in contraction. Investors believe values may have finally bottomed.
➥ THE TAKEAWAY
Big picture: CRE sentiment is improving, but the math still doesn’t pencil. Until it does, patience will outweigh conviction. Investors see opportunity ahead, but only if rates ease or pricing adjusts.
Want the full breakdown? 📥 Download the complete Q3 2025 Fear & Greed Index Report for sector deep dives, sentiment shifts, and exclusive investor insights.
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✍️ Editor’s Picks
Tax planning moves: Investors and businesses can combat rising taxes by leveraging IRS-approved strategies such as cost segregation, bonus depreciation, R&D tax credits, and 179D energy deductions. (sponsored)
Heat index: Miami remains the nation’s toughest rental market, but Chicagoland has jumped into second place as limited supply and strong demand push Midwest competition to new highs.
REITs in action: In 2023, U.S. REITs supported 3.5M jobs and generated $278B in labor income through operations, construction, and investor payouts.
Valuation gap: The growing gap between public and private real estate values may limit deals now but often precedes strong REIT outperformance.
Builder blues: Homebuilders’ profits are falling as housing demand shifts from the previously booming West and South to the East and Midwest.
Shelter costs: Housing costs in the U.S. continue to outpace income growth, driving inflation and worsening affordability for both renters and homeowners.
Smoke clears: L.A.’s fire recovery has progressed faster than expected, but momentum may stall as cleanup efforts begin to lose energy and resources.
🏘️ MULTIFAMILY
Data on trial: Facing lawsuits and mounting local bans, RealPage is preparing its own legal counterattack to defend its rent-pricing software.
Multifamily divide: A weakening labor market is widening the gap between Class A and Class B/C apartment performance, with high earners still renting while lower-wage renters face affordability pressures.
Stuck in place: U.S. household mobility hit a record low in 2024, with just 11.8% of Americans relocating.
Leasing lift: New apartments leased slightly faster in early 2025, signaling modest absorption gains despite lingering oversupply and a competitive, renter-friendly market.
Bonded for good: JPI’s latest Texas workforce housing project uses a rare 100% tax-exempt bond structure, allowing the city to gain equity without upfront costs.
Upgraded outlook: Essex’s upgrade signals renewed investor confidence as rent growth, low vacancies, and limited new supply boost West Coast multifamily prospects.
Brookfield bet: Brookfield CEO Bruce Flatt expects rents to rise sharply due to limited new construction and improving financing conditions.
🏭 Industrial
Storage slowdown: Self storage valuations, rents, and development have softened in 2025 amid rising costs, tepid demand, and tighter capital markets.
Storage crossroads: The self-storage sector is stabilizing after a post-pandemic cooldown, but future performance hinges on interest rate normalization and the absorption of oversupply in saturated markets.
AI invasion: OpenAI and Nvidia are teaming up with UK startup NScale to pour billions into new UK data centres.
Gives you wings: Red Bull and partners have broken ground on a $1.5B, 2.3M SF bottling and can plant in Concord, NC, a fully automated campus set to produce 3B cans annually.
Electric alliance: Mercedes-Benz signed $11B in battery supply deals with LG Energy Solution, securing 107 GWh for EV production across the U.S. and EU.
🏬 RETAIL
Walmart wonderland: Walmart's massive new Bentonville HQ is transforming the city into a live-work hub, blending community, culture, and corporate clout.
Value menu: Convenience stores like Wawa and Casey’s are stealing morning traffic from fast-food chains, thanks to better food, more variety, and rising consumer perception of value.
Growth spurt: Kroger plans to ramp up new store openings by 30% in 2026, even as it closes underperformers, betting on e-commerce growth and delivery efficiency.
🏢 OFFICE
Remote plateau: The remote work boom has stabilized, with Census and WFH data showing work-from-home rates leveling off in 2025.
Legal anchor: Simpson Thacher is nearing a 700K SF lease at Extell’s $1B Fifth Avenue tower, marking one of Manhattan’s largest office deals of 2025.
Design district: HFI Capital bought a 120K SF West Dallas office building for its new HQ, rebranding it “The Capital” and anchoring the area’s rise as a business hub.
🏨 HOSPITALITY
Portfolio pressure: Tarsadia Capital is urging Sunstone REIT to sell or liquidate, citing weak performance and an unsustainably small portfolio.
📈 CHART OF THE DAY
New apartment supply in the Northeast and Mid-Atlantic reached 102,240 units in the year ending Q225 and is expected to decline slightly but remain steady around 80,000–90,000 units annually over the next few years.
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