Bidder Dynamics Stabilize Amid Market Uncertainty, Capital Flows Continue to Grow

JLL's Global Bid Intensity Index, a leading indicator for transaction volumes, shows bidding dynamics stabilizing after a period of heightened macro uncertainty. The index marked its first month-over-month improvement since December 2024, indicating more competitive bidder dynamics. Despite market volatility, institutional investors are returning with more capital sources and a renewed appetite for real estate, with borrowing costs and real estate values stabilizing in most markets.

Following a period of heightened macroeconomic uncertainty, JLL's Global Bid Intensity Index, a leading indicator for transaction volumes, has shown signs of stabilization. The index marked its first month-over-month improvement since December 2024, indicating more competitive bidder dynamics [1]. This positive trend comes as property sector fundamentals remain strong and asset valuations have generally held firm in year-to-date 2025, despite investor sentiment being tested.

The stabilization in bidding dynamics is a result of institutional investors returning to the market with more capital sources and a renewed appetite for real estate. According to Ben Breslau, Chief Research Officer at JLL, "With no shortage of liquidity, institutional investors are returning to the market with more capital sources and a renewed appetite for real estate" [1]. This shift is driven by a combination of factors, including stabilized borrowing costs and real estate values in most markets.

While market volatility persists, the depth of capital targeting commercial real estate continues to grow. Bid-ask spreads are improving toward healthy levels across multiple sectors, with the living sector and retail showing notable improvements. However, supply chain uncertainty has impacted bidding intensity in Industrial and Logistics, while Office bid dynamics are showing improvement, driven by growing bidder pools and greater number of lenders quoting on office loans [1].

Investors are gradually accepting uncertainty as the new normal, leading some to embrace higher risk tolerances. The attractiveness of CRE investments as a long-term store of value remains intact, and the exceptionally strong debt markets are expected to lead to continued growth in capital flows [1]. Despite increased market uncertainty brought on by tariff announcements, real estate capital markets are proving very resilient.

The housing market outlook, however, remains uncertain. The decline in housing sales and prices began once interest rates started rising after February 2022. Measures of economic uncertainty have spiked since Trump’s return to Washington, impacting consumer confidence and eroding the willingness to make big-ticket purchases [2]. The slowdown in housing suggests broader weakness across the economy, with unemployment ticking up slightly in export-oriented industries most exposed to U.S. tariffs.

In the energy sector, EPIC Crude pipeline owners are exploring a sale, with any deal likely to value the energy infrastructure at around $3 billion including debt. The owners are working with investment bankers on the sale and have begun sounding out potential buyers for EPIC Crude, with a pipeline company with existing Permian oil assets being the most likely buyer [3].

As the year progresses, investors deploying capital through 2025 and into 2026 will likely see an early mover advantage in terms of returns, an advantage that will diminish as the cycle matures. Despite the challenges, real estate capital markets are proving resilient, with plenty of opportunities expected over the remainder of 2025.

References:
[1] https://www.prnewswire.com/news-releases/bidding-dynamics-stabilize-over-previous-three-months-july-marks-first-improvement-of-2025-302538984.html
[2] https://ca.finance.yahoo.com/news/light-end-tunnel-real-estate-195603021.html
[3] https://www.reuters.com/legal/transactional/epic-crude-pipeline-owners-explore-3-billion-sale-sources-say-2025-08-25/