Economic uncertainty led to a slowdown in the commercial real estate market earlier this year, but one indicator has finally ticked up. This suggests signs that capital is returning to the commercial real estate market, which may be a positive sign for investors. Although there is still uncertainty, investors may have reason to be optimistic going forward.
The Bid Intensity Index
In July, real estate firm JLL’s Bid Intensity Index ticked up for the first time this year. The global Bid Intensity Index is a proprietary indicator that tracks competitiveness in the direct investment market. It combines three sub-indices — bid-ask spread, bids per deal and bid variability — derived from bid data.
By combining bid data from multiple sub-indices, the Bid Intensity Index aims to provide forward-looking insights into the momentum and liquidity of capital markets. The index provides insights into the market’s competitiveness before transaction volumes confirm the trends, JLL says
An Uptick in July
The Bid Intensity Index in July saw its first improvement since December. The firm says this indicates market-wide investment sales bidding activity is getting competitive again after a period of uncertainty.
At the beginning of 2025, the index eased due to more volatile bond markets, which affected underwriting. Additionally, uncertainty surrounding trade policy further softened the index. After months of uncertainty, the index is finally stabilizing, indicating an increase in market competitiveness.
Sector Breakdown
JLL provided a sector-by-sector breakdown in its report, illustrating how market dynamics impact various property types. The breakdown includes:
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Living/multi-housing: Leads bidding competitiveness due to high liquidity and housing shortages.
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Industrial & logistics: Lagging the living/multihousing sector somewhat due to a slowdown in leasing in the U.S. and other markets.
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Retail: Bid intensity has improved since 2024, driven by strong competitiveness across most markets. Supply and demand are in balance, and consumer spending is strong.
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Office: Showing improvements in competitiveness thanks to an increase in the number of bidders and a larger number of lenders willing to make loans on these properties.
The sector breakdown indicates improvement across most markets, resulting in an overall increase in competitiveness.
Market Drivers & Investor Sentiment
Several factors are contributing to the recent uptick in competitiveness, including market drivers and investor sentiment. Investors are returning to the market with increased liquidity, and JLL says they are willing to accept more risk today, referring to this as “risk-on mode.”
In addition, borrowing costs and real estate values have stabilized in most markets, JLL reports. As a result, the firm expects momentum to pick up in the second half of the year.
Although market uncertainty contributed to a softening of the index in the first half of the year, investors appear willing to accept some uncertainty, such as trade and geopolitical tensions. the new normal.
JLL also highlights strength in the debt markets as a potential driver of continued growth in capital flows. The combination of these factors is driving stronger investor sentiment and an improvement in bidding dynamics, the firm said.
Source: “Commercial Real Estate Market Shows Signs Of Recovery As Bid Intensity Increases”
