The CRE Weekly Digest by LightBox

Fresh economic data brought a much-needed sigh of relief this week, as Martha Coacher, Manus Clancy, and Dianne Crocker tackled everything from the “Goldilocks prints” to the bullish outlook among lenders eager to return to dealmaking. Manus coined a new term, “office collateral damage,” comparing the current state of office space to the retail apocalypse of years past. The team also weighed in on the economic fallout from the Southern California wildfires and examined the rise of buy-to-convert projects—turning underperforming offices into residential properties. Amid it all, an unprecedented wave of optimism is breaking through, leaving everyone wondering just how far it can carry the market.  Have question for the pod team? Send them to podcast@lightboxre.com.00:15 Markets Exhale on Inflation Data 02:52 Retail Roundup and Economic Indicators 05:50 Optimism in the Lending Market 09:10 Retail Trends and Store Closures 14:59 Bank Earnings and Confidence in Lending 18:08 Impact of LA Wildfires 20:56 Office “Collateral Damage” Transactions and Multifamily Markets 24:12 Market Trends and “Price Clustering” 27:06 Future of Drone Deliveries in Retailwww.lightboxre.com

In a week that was chock full of economic data for investors to digest, there was no lack of market news for Martha Coacher, Manus Clancy, and Dianne Crocker to consider as a bond rout took hold, and wildfires continued to burn out of control in the Los Angeles area leaving a path of devastation. With the holidays firmly in the rear-view mirror, the team takes a spin through the spirit of the U.S. economy’s past, present, and future, starting with December’s  40-basis point rise in 10-year Treasury yields, to current concerns about inflationary pressure. But there is more to come in 2025, so questions remain on how the new administration’s proposed tariffs and spending cuts could shape interest rates and CRE. Professor Manus walks through how to read the latest news on CMBS data and Dianne takes us through the LightBox CRE Activity Index. The Index dropped to 56.8 in December—a steeper-than-average 23-point decline that flies in the face of fresh optimism in the CRE market, offering a hopeful perspective on the opportunities and resilience driving the industry forward.Have question for the pod team? Send them to podcast@lightboxre.com.01:57 Economic Overview and Recent Events 04:48 Interest Rates and Inflation Concerns 09:34 Market Sentiment and CRE Enthusiasm 11:26 Lightbox CRE Activity Index Analysis 18:30 Who's Bullish on Office? 21:13 Manus Does a CMBS Dive 25:07 Leasing Trends and Notable Deals 36:08 Multifamily Market Activity and Insights www.lightboxre.com

In the first episode of 2025, guest host Tina Lichens, General Manager of LightBox Capital Markets joins Manus Clancy and Dianne Crocker to kick off the new year with an encouraging look back at the final few weeks of 2024 and a forward-looking discussion of expectations for the New Year. Tina’s observation of an unexpected surge in property listings on the LightBox RCM® platform during the final weeks of 2024 dovetails with bullish sentiments from industry leaders as we head into 2025. Dianne shared an early look at responses from the LightBox Capital Markets Advisory Council’s Q4 survey results. Council members’ optimism is fueled in part by the dawn of a new chapter for the office sector but tempered by the year-end high in the 10-year Treasury yield and the likelihood of interest rates staying higher for longer. Listen as Tina, Manus, and Dianne share their predictions for interest rates, dealmaking, and lending for 2025, as well as their plans for industry conferences in early 2025, including Tina’s upcoming panel on innovative applications of AI in CRE. Listen to the end for a lighthearted recap of Manus’ epic food fail and a New Year’s resolution inspired by an unlikely culinary combination. Don’t miss this blend of market insights and fun to start the year off right! Have question for the pod team? Send them to podcast@lightboxre.com.01:00 Market Review: A Bumpy December Ends with Elevated 10-Year Treasury Yield 05:15 A Surprise on the Upside for Late December   07:00 Anecdotes from the Field for 2025 Expectations 13:40 Interest Rate Predictions: Higher for Longer 21:13 Transaction Velocity: Up by Double Digits YOY in 2025 As Floodgates Open 25:45 The “Noise” on Distress and What It’s Important 29:32 Early 2025 Conferences 32:38 New Year's Resolutions www.lightboxre.com

This week, Martha Coacher, Manus Clancy, and Dianne Crocker take a look back at CRE’s hits and misses in 2024 with a review of "Successes, Setbacks, and Surprises."   The discussion covers 2024 as a tale of two halves, from the successes—like banks resuming lending, impressive CMBS volumes, and double-digit growth in the LightBox CRE Activity Index—to the setbacks, including the inconsistent path of the 10-year Treasury, persistent “hotter for longer” economic data, and rising distress in office and multifamily sectors. The team also highlights the year’s surprises, such as transaction activity holding steady despite market challenges and fewer bank failures than expected. Tune in for insights on how CRE remained deeply connected to economic indicators, the persistent deficit, and what it all might mean heading into 2025. Have question for the pod team? Send them to podcast@lightboxre.com.07:11 Successes of 2024: Interest Rate Cuts and Lending Market Recovery 12:54 The Adaptive Reuse Glow-Up and Redevelopment Trends 18:04 Setbacks of 2024: Inflation Concerns, Office Distress, and Multifamily Challenges 31:04 Surprises of 2024: Labor Market Plot Twists, Consumer Resilience, and Economic Wins www.lightboxre.com

This week, Martha Coacher, Manus Clancy, and Dianne Crocker unpack the mixed signals from the latest economic data including November’s wholesale inflation report, which came in hotter than expected, alongside an expected uptick in consumer inflation and a notable jump in weekly jobless claims.  All this, while Wall Street has come off a mixed session with some sky-high valuations.  Is the Fed getting bullied by the market to proceed with the December rate cut?  And Dianne provides the detail behind the LightBox CRE Activity Index’s second consecutive monthly decline, but strong YoY growth.  With movement on inflation, interest rates, and CRE transactions, this episode dives into the challenge of squaring both sides of the market – the CRE side and the broader investor market.  And if you’re curious about what leaps of faith and lords a-leaping have to do with the market, you’ll have to listen to the end. Have questions for the podcast team? Reach out to podcast@lightboxre.com. 05:40 Is the Fed feeling the heat? A closer look at the pressure to cut rates. 10:55 November CRE Activity Index reveals what’s bubbling in deal-making. 17:58 Retail’s holiday hustle: How trends are shaping this shopping season. 20:39 Office-to-residential conversions: Successes, challenges, and lessons learned. 30:50 DC’s vacancy dilemma with expiring government leases. 35:35 Holiday market predictions featuring leasing trends, forecasts, and festive insights. www.lightboxre.com

This week, the LightBox team welcomes Spencer Levy, global client strategist and senior economic advisor for CBRE, for a compelling conversation about the seismic shifts in commercial real estate since the pre-COVID era. Levy compares the “Yellow Brick Road” era of low interest rates, strong fundamentals, and geopolitical stability before 2020 with today’s more turbulent landscape, shaped by inflation, high interest rates, and global uncertainty. He recommends practitioners follow the mega-trends reshaping the CRE industry: the reshoring of manufacturing, and the transition from CBDs (central business districts) to live-work-play neighborhoods. The discussion also delves into how adaptive reuse offers a potential lifeline for office assets in a world where Class B buildings face mounting challenges. While cracks are appearing in multifamily and industrial fundamentals, Levy surprises the team by spotlighting renewed strength in top-tier office markets. This episode is chock full of great takeaways as well as some fun detours that include Levy's passions for cooking and music.Have questions for the podcast team? Reach out to podcast@lightboxre.com.00:56 Yellow Brick Road vs the Opposite04:11 Interest Rates will Stay Higher for Longer06:13 Megatrends Shaping Commercial Real Estate10:26 Asset Conversions, Rezoning and the Case for Patience16:40 Spencer’s Recommendations: Build Today and Follow the Megatrends22:52 Open Air Retail Opportunities Driven by Consumer Sentiment27:07 Spencer Levy's Personal Touch: Music and Brisketwww.lightboxre.com

This week on the CRE Weekly Digest podcast, Jamie Woodwell, Head of CRE Research at the Mortgage Bankers Association, shares key insights that signal reasons for optimism in CRE lending as 2025 approaches. The discussion covers the impact of Q3 rate cuts on loan originations, a significant uptick in CMBS single-asset, single-borrower deals, and Freddie and Fannie’s expanded multifamily loan caps for the coming year. The team also examines the increasing differentiation in office property risks and its implications for investment strategies heading into 2025.  Have questions for the podcast team? Reach out to podcast@lightboxre.com.02:45 Current Lending Sentiment and Market Dynamics 06:03 Bank Confidence and Regulatory Scrutiny 08:51 Interest Rates and Their Impact on Lending 12:07 Q3 Lending Growth and Market Forecasts 14:45 Differentiation in the Office Sector 18:05 Multifamily Lending and FHFA Updates 20:46 Optimism in the CRE Market 24:13 Conclusion and Future Outlookwww.lightboxre.com

The LightBox podcast team evaluates the week’s bullish and bearish signs contributing to renewed uncertainty in CRE. With a bond market signaling that investors are concerned about geopolitical events and mixed economic data, there’s plenty for the team to dive into: 10-Year Treasurys’ new heights, Fed speak on interest rates, a tale of two divergent retailers like Walmart and Target and some warnings on potential inflation. But as always, there are CRE data and stories delivering some positive offsets. In a special segment, Dianne and Martha, cover an inspiring adaptive reuse story by interviewing Luis Menendez, Director of Construction for the Tunnels to Towers Homeless Veterans Program. Their program transforms distressed properties—like hotels that are no longer viable as businesses—into affordable housing for veterans. For more on the adaptive reuse project, check back next week for the full interview. Have questions for the podcast team? Reach out to podcast@lightboxre.com.00:16 Economic Data and Market Concerns 00:43 Which Way is the Wind Blowing? 03:25 Is the Fed Blowing it? 06:34 Retail Earnings and Consumer Behavior 15:56 Commercial Real Estate Sales Trends 20:32 LightBox Data Dive 22:30 Adaptive Reuse and Housing for Veterans 30:01 The Midtown Four Seasons is Back www.lightboxre.com

You’ll want to take notes during this episode where the team dives into insights from Partner Valuation Advisors’ senior managing directors, Brandon Nunnink and Eric Enloe, on the evolving private REIT market. They explore Q3 trends on bid-ask spreads, the reset in markets like San Francisco, the “enthusiasm gauge” of 2024, cap rate analysis and office price discovery, and where there are untapped opportunities. The conversation also touches on regulatory impacts, the “valuation revolution,” and the momentum of industry benchmarking. Have questions for the podcast team? Reach out to podcast@lightboxre.com.01:09 Public vs. Private REIT Markets  03:01 "Kitchen Sink” Approach to Valuation 11:41 Cap Rate Analysis and Market Trends  16:27 Opportunities in the Current Market  30:19 AI and Benchmarking  www.lightboxre.com

In this special edition, Martha Coacher and experts Manus Clancy and Dianne Crocker review Trump’s proposed economic agenda, the latest Fed rate cut, and the LightBox CRE Activity Index. With Trump’s election win setting the stage for anticipated policies on tariffs, taxes and deregulation, the team explores the immediate and long-term impacts these could have on commercial real estate. They also unpack the Fed's recent decision and what the CRE Activity Index reveals about market sentiment and investor activity as the industry navigates a shifting policy landscape. Have questions for the podcast team? Reach out to podcast@lightboxre.com.02:57 The Wealth Effect and Economic Implications 09:01 Tariffs and Their Impact on Inflation 11:52 Construction Costs and Housing Market Dynamics 15:13 Tax Cuts and Their Economic Consequences 17:57 Labor Market Challenges and Immigration Policies 21:05 Regulatory Changes 29:47 CRE Activity Index Insightswww.lightboxre.com