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July marked a turning point in competition for commercial real estate properties, with bids rising for the first time in more than a year. That trend continued into October.

Bidder dynamics during the month saw the second-highest monthly gain over the past year, according to JLL’s Global Bid Intensity Index. Competitiveness continues to improve, partly due to interest rate cuts by the U.S. Federal Reserve in September and October.

The index measures bidding activity in order to give a real-time view of liquidity and competitiveness in private real estate capital markets. That, in turn, is an indicator for future capital flows across investment sales transactions.

“As capital deployment accelerated during the third quarter, institutional investors are signaling increased confidence in the market, even as uncertainty persists,” said Richard Bloxam, CEO of capital markets at JLL. “We expect business confidence will continue to improve and pave the way for continued capital flow growth into 2026.”

Of all the commercial real estate sectors, multifamily housing led in competition with the strongest bidding activity. That is being driven by housing shortages across most major markets. Rental vacancy rates are still high, but more renters are expected to re-lease in the coming year because the for-sale housing market is so expensive.

JLL estimates that there is a shortage of 3.5 million housing units in the U.S. That, along with near-record-high home prices, is keeping renters in place for longer and will likely push multifamily vacancy rates lower once all the new supply makes it through the pipeline. All of that is driving continued strong conviction among multifamily investors.

There was also a significant rebound in bidding competitiveness for the industrial and logistics sector, as trade policy uncertainty settled slightly.

There was some softening in competition for retail properties simply because there were more of them for sale, so buyers had more choice. There were, however, more deals in the market. Investor demand is being driven by a rise in consumer and retail spending, for now at least.

The office sector is also well into recovery, with bid dynamics rising from all-time lows in late 2023. Investor sentiment is improving with expanding bidder pools and increased lender participation.

Near-term interest rate cuts are still in question, especially given stronger-than-expected employment figures for Septemberreleased late due to the government shutdown. Investors, however, seem to be less sensitive to the timing, as they still expect rates to come down further next year.

“While market uncertainty will continue to impact decision-making, the growth picture is looking more positive for 2026. Having worked through various junctures of uncertainty over the past year, more investors are showing a higher tolerance for risk,” Bloxam said. “Coupled with the exceptionally strong debt markets, we expect this will catalyze continued improvement in liquidity.”