The CRE Finance Council (CREFC) said Wednesday its Second-Quarter 2025 Board of Governors Sentiment Index survey surged 27.8% to 112.3 from 87.9 in Q1. The rebound, one of the strongest quarterly improvements in the index’s history, marks a decisive return to positive territory, reversing last quarter’s sharp decline, and climbing back above the neutral 100 baseline, CREFC said.
Sentiment regarding the economic outlook turned positive, with only 27% of respondents expecting worse economic conditions over the next 12 months, a major improvement from 80% last quarter. Fifty-four percent expect stable conditions and 19% anticipate improvement.
The outlook for CRE fundamentals stabilized in this survey, with only 19% of respondents expecting worsening conditions, down from 50% in Q1. Eighty-six percent of respondents expect more borrower demand, up from 48% last quarter. Notably, 0% of respondents expect less demand. And 49% of respondents now hold a favorable overall outlook, up from 22% earlier this year.
Lisa Pendergast, president and CEO of CREFC, said, “The turnaround in our Sentiment Index highlights the CRE finance industry’s resilience and adaptability. What’s especially encouraging is the breadth of the recovery, from robust borrower demand to optimism around AI-driven data centers. Challenges remain, but the market is regaining its footing.”
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