Even with ongoing economic pressures, signs are pointing to a rebound in commercial real estate values. According to Invesco’s latest analysis of the Federal Reserve’s April 2025 Senior Loan Officer Opinion Survey (SLOOS), lending conditions for commercial properties are loosening noticeably.

What’s happening:

The survey revealed that just 9% of banks reported tightening standards on CRE loans — a dramatic improvement from 67% in April 2023 and 20% a year ago. This signals a more favorable lending environment, despite market unease triggered by early 2025 tariff headlines.

Why it matters:

Invesco highlights a historically strong negative correlation (-0.79) between stricter bank lending and commercial property value growth. Based on long-term trends, the April SLOOS data implies a 69% chance that capital values will climb by about 3.9% annually through the end of 2025, recovering from the softer valuations seen in late 2024.

Context is key:

The survey’s timing (March 31–April 11) captured market turbulence following the announcement of proposed Trump-era tariffs on April 2, dubbed “Liberation Day” by traders. The absence of a tightening shift from banks during that volatility suggests lenders remain confident in CRE fundamentals, rather than reacting with caution.

➝ THE BOTTOM LINE

Private capital may benefit: While public markets grapple with trade policy uncertainty, Invesco believes private real estate markets are poised to see steady, moderate growth in values. Looser lending standards and resilient fundamentals could offer a more stable environment for investors through late 2025.