News release

First-mover advantage begins to materialize for commercial real estate

Investors with strong liquidity begin to see opportunity to deploy across the capital stack with a top focus on credit strategies and sector diversification

January 11, 2024

Abigail Goldsbrough

+44 790 211 5887

CHICAGO, January 11, 2024 – Clarity across markets has been in short supply recently but signs that investors are starting to reengage through a broader set of strategies are beginning to emerge. By the end of 2025, $3.1 trillion of real estate assets globally will have maturing debt, according to JLL’s Global Capital Outlook research. The current refinancing shortfall for these loan maturities is an estimated $270-$570 billion, which will catalyze transaction activity and provide a clear first-mover advantage for well capitalized investors in 2024.

Currently, substantial liquidity exists, with dry powder for commercial real estate (CRE) totalling $402 billion sitting on the sidelines. However, a clearer picture is already emerging as real estate has seen a growing number of bidders re-enter the market according to JLL’s proprietary Bid Intensity Index. This movement is being driven particularly by activity from private investors and select institutional capital with the U.S. being furthest along in its price adjustment cycle, followed by Europe and Asia Pacific.

JLL's proprietary Bid Intensity Index shows improved market trends since year-end 2022, despite the late summer run up in bond yields. Bidding activity was on the rise in late 2023, with the average number of bids per deal increasing by 16%, narrowing the bid-ask spread.

“This reset in values will both challenge capital and catalyze liquidity,” said Richard Bloxam, CEO, Capital Markets at JLL. “There is absolutely uniform understanding that pricing has changed. Given the quantum of dry powder, there will be a considerable first-mover advantage for capital that can deploy quickly and mobilize around opportunities as market fundamentals improve.”

While the current nature of the markets remains fragile – as evidenced by the recent volatility in bond yields – the long-term attractiveness of CRE investments remains largely intact. From a 10-year return perspective, real estate has held up consistently well against other asset classes.

“In our view, while the current higher-rate environment has created a cooling effect on real estate’s attractiveness in the short-term, strategic allocation targets into real estate are expected to remain stable and, in some cases, trend higher, especially in the long run,” noted Bloxam. “We anticipate this will materialize initially in sectors, such as living and logistics, and in markets with strong rental growth expectations where values also appear to be bottoming out.”

As was the case for many trends, the COVID-19 era was an accelerant, but not a catalyst for portfolio diversification strategies – which began shifting in the decade leading up to the pandemic. Collective exposure to the logistics and living asset classes across the largest core funds has grown by $138 billion, an increase of 263%, since 2016. These sectors now account for around 62% of core fund exposure in the U.S, 52% in Asia Pacific and 46% in Europe.

“While we will continue to see this reallocation of capital as investors reengage with the market, it’s important to note that it is more about diversification of portfolios than wholesale shifts,” said Bloxam.

Bloxam expects to see growth in emerging sectors as well. “Looking beyond these more established sectors, alternative assets should also be in focus for investors. Technological and societal changes will create longer term opportunities in areas such as renewable energy, infrastructure and advanced manufacturing, to name a few.”

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit