The Bottom Is In: CRE Values Confirmed Their Floor

TL;DR

Private U.S. CRE values officially bottomed in Q4 2024 according to the NCREIF Property Index. Office was the last sector to find its floor, troughing in Q2 2025. Redemption queues across open-end funds have fallen from a peak of $41B to approximately $25B. CRE investment volume is up 17% through October 2025. Institutional sales activity has risen 17%. The private credit market has reached $238B, and lending activity is up 35% year-over-year. The correction is over — and the recovery is underway.

The NCREIF Data Is Clear

I've been telling our investors at F6 Partners for months that the data was pointing toward a confirmed bottom, and now the numbers are in. The NCREIF Property Index — the benchmark that tracks private U.S. commercial real estate values across institutional portfolios — confirmed that values troughed in Q4 2024 for most property types.

This isn't speculation. This is backward-looking data that captures actual transaction evidence and appraisal adjustments across billions of dollars of institutional real estate. The industrial, multifamily, and retail sectors all found their floors by late 2024. Office, as expected, was the laggard — not reaching its trough until Q2 2025. But even office has now stabilized, and the worst of the writedowns are behind us.

The significance of this cannot be overstated. For two years, the CRE market operated under a cloud of uncertainty about where values would settle. That uncertainty paralyzed capital deployment, froze transactions, and created a bid-ask spread that made deals nearly impossible to close. That era is ending.

Redemption Queues Are Draining

One of the clearest signals of market healing is the decline in redemption queues across open-end real estate funds. At the peak of the correction, investors had lined up $41B in redemption requests — essentially demanding their money back from funds that couldn't liquidate assets fast enough to meet withdrawals.

That number has fallen to approximately $25B. While still elevated by historical standards, the trajectory is unmistakable. Fund managers are meeting redemptions through asset sales at stabilized prices rather than fire-sale dispositions. New capital is entering some funds for the first time in over a year. The panic that characterized 2023 and early 2024 has been replaced by measured rebalancing.

At F6 Partners, we view the redemption queue decline as a leading indicator of institutional re-engagement with CRE. When the largest allocators in the world stop running for the exits and start selectively re-entering — including private equity firms deploying fresh capital into real estate — it signals that the institutional consensus has shifted from risk-off to opportunity-seeking.

Investment Volume and Lending Surge

The transaction data confirms the sentiment shift. CRE investment volume is up 17% through October 2025 compared to the same period in 2024. Institutional sales activity has also risen 17%, driven by portfolio repositioning and the deployment of capital that had been sitting on the sidelines.

Perhaps more telling is the lending environment. CRE lending activity is up 35% year-over-year, fueled in large part by the private credit market, which has grown to $238B in assets under management. Alternative lenders have stepped in where traditional banks pulled back, providing bridge financing, mezzanine debt, and preferred equity that is keeping the transaction market liquid.

This lending surge is critical because real estate is fundamentally a leveraged asset class. When debt is available and reasonably priced, transactions happen. When it disappears, the market freezes. The return of lending — even at higher spreads than the 2021 era — is what's unlocking the recovery.

What This Means for Operators

At F6 Partners, the confirmed bottom validates our strategy of maintaining discipline through the downturn while building relationships and pipeline for the recovery. We didn't chase distressed deals at prices that weren't truly distressed. We didn't capitulate on underwriting standards to force transactions. We waited for the data to confirm what our experience told us was coming.

Now the data is here. Values have stabilized. Lending is available. Transaction volume is increasing. For investors evaluating their options, understanding REITs vs private real estate and which one actually wins is more relevant than ever. The operators who maintained their platforms, kept their investor relationships warm, and prepared their pipelines are the ones who will capture the recovery. Those who retreated entirely will find it much harder to re-enter.

The bottom is in. The question now isn't whether to deploy capital — it's where and how quickly.