Investor interest in commercial real estate (CRE) surged in June, marking the strongest monthly increase in a year, according to the latest quarterly bidding and credit indexes from JLL. July also recorded the second highest number of unique bidders in the index’s five-year history, highlighting increased competition among buyers. This elevated activity comes despite persistent high borrowing costs, driven by a broad rise in liquidity from commercial mortgage-backed securities, insurance companies, government programs, and debt funds.

Retail and industrial sectors have drawn the most investor attention. Retail’s resurgence is notable given its recent struggles amid the growth of e-commerce during the pandemic, with property owners holding tight due to attractive returns. Industrial real estate continues to benefit from trends such as reshoring and reindustrialization, with manufacturing leasing up 27% year-over-year, as companies seek to mitigate supply chain risks and reduce tariff impacts by moving production closer to the U.S.

Conversely, the multifamily sector remains the weakest in terms of bidding and credit activity. This is largely attributed to an oversupply of new construction and persistently high vacancies in stabilized properties, even as overall national vacancy rates fall due to lease-ups in newer developments. Market observers see this as a correction phase for multifamily, unlike the more dynamic performance seen in retail and industrial segments.

JLL’s Lauro Ferroni notes there is no evidence of froth or excessive risk in the current CRE market despite ongoing macroeconomic uncertainties. The recent U.S. Treasury’s decision to buy long-term bonds may also support ongoing property transaction underwriting and boost investor confidence. Ferroni suggests that while growth in bidding and competition will likely continue, it will do so gradually rather than explosively, backed by solid capital inflows and a stable real estate outlook.