[[{“value”:”
**CRE Sentiment Report Reveals Investment Strategy Shifts Amid Market Volatility**
*Asaf Raz*
In the midst of ongoing economic volatility and shifting trade policies, commercial real estate (CRE) investors are adjusting their strategies for 2025, according to a recently released market sentiment report by Agora. The report underscores the challenges firms face in raising capital, as well as a pivot toward different asset classes and regions due to lingering uncertainty.
**Key Findings from the Report:**
– 49% of respondents are exploring new CRE asset classes.
– 48% are targeting new investment regions.
– 84% are concentrating on historically stable, income-producing asset classes—though nearly half (48%) are also pursuing opportunistic strategies.
– 58% reported increased difficulty in raising capital.
– 76% said investor concerns about market volatility are growing.
Asaf Raz, Agora’s Vice President of Marketing, noted that the findings largely align with current market dynamics. However, one trend that stood out was the notable increase in investor communication. “More than one-third of firms are now sending weekly updates, compared to the previous standard of quarterly reports,” Raz said.
**Capital Challenges and Liquidity Moves**
To adapt to today’s tough financial environment, investment firms and general partners are taking steps to ensure liquidity for acquisitions or property upgrades. Some are turning to partial refinancing or increasing preferred equity positions as a way to unlock capital.
Asset management is also under pressure to perform. “A lot of groups are working to drive cash flow internally, especially with a recession potentially looming,” Raz said. “The firms that can quickly demonstrate real-time performance—down to the line item—will be best positioned to free up capital.”
**Investor Communication Takes Center Stage**
Driven by fast-changing economic conditions, firms are ramping up communications. The report revealed that 38% are now sending weekly updates to investors, and 28% are reporting monthly. Raz attributes this shift to the demand for real-time data. “In calmer markets, quarterly PDFs may suffice, but with current volatility, investors want immediate insights,” he explained.
**Other Notable Observations:**
– **Multifamily Leads, with Mixed-Use Close Behind:** Multifamily remains the preferred asset class, followed by mixed-use properties. These asset types offer diversification and blend stable residential income with local service retail—an appealing model in convenience-focused neighborhoods.
– **Sunbelt Loses Its Shine:** Once a hotspot for CRE investment, the Sunbelt has seen waning interest, with only 2% of respondents planning to invest there. Investors are now favoring more narrowly defined markets such as Greenville, Huntsville, and Tampa. “The appeal of broad regional plays has diminished, giving way to more targeted strategies,” said Raz.
– **Market Uncertainty Expected to Persist:** The report indicates that most respondents expect the current environment to last at least another 13 months. As a result, underwriting and strategic decision-making are evolving. Younger managers appear especially adept at adopting new technologies and adjusting approaches. Raz added, “Firms that embrace digital tools—particularly for reporting and capital raising—will be better equipped to succeed when the market turns.”
This latest sentiment report reflects a clear recalibration across the CRE investment landscape, with firms embracing adaptability, communication, and data-driven decision-making in response to ongoing macroeconomic challenges.
“}]]
