As interest rates have normalized, income—not price appreciation—is driving real estate returns once again.
authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
NCREIF ODCE Index quarterly return attribution
Column chart showing commercial real estate return attributions by quarter. Income has returned to its historical role as the primary driver of CRE returns as interest rates have normalized over the last three years.
Source: NCREIF ODCE Index, as of Q2 2025, latest data available.

Today’s chart of the week highlights a key insight from our Q3 2025: Mapping the Markets chartbook, which provides analysis across macroeconomics, public markets, private markets and portfolio construction. Explore the full chartbook here.

  • Income has returned to its historical role as the primary driver of commercial real estate (CRE) returns as interest rates have normalized over the last three years.
  • While CRE markets have experienced a multi-year correction in response to higher rates, pricing has stabilized amid improving fundamentals, investor sentiment and deal activity.
  • The Fed’s September rate cut, alongside market expectations for additional easing by year end, should further support the recovery.
  • CRE debt offers investors a timely way to participate in today’s income-driven market while maintaining an emphasis on capital preservation.
  • Nearly one third of all outstanding CRE debt—roughly $2 trillion—will mature by the end of 2027, creating opportunities for lenders to refinance on more favorable terms or originate new loans in a more disciplined underwriting environment.
contributing authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
footnotes + disclosures

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