CRE: The Great Hesitation

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News Flash

When Waiting Becomes a Strategy

Commercial real estate investors have mastered the art of not making moves in Q2 2025. They're calling it the "Great Hesitation" — and honestly, that's probably the most accurate market description we've heard in months [Source].

After a busier Q1, dealmakers are pumping the brakes hard. Economic uncertainty, elevated interest rates, and tariff impacts have investors asking: "Why rush?" The numbers tell the story: - 30-year fixed refinance rates sit around 6.96% [Source] - Refinance activity is climbing as borrowers face debt maturities in this higher-rate environment [Source]

But here's where things get interesting: All that maturing commercial debt could actually create opportunities for the well-positioned [Source]. AI and data centers continue driving demand for specialized real estate infrastructure [Source]. Companies are rethinking their digital infrastructure needs, with data centers taking center stage [Source].

Insurance Storm Clouds Gathering

Hurricane activity is predicted to be high in 2025. In coastal areas, your insurance premiums are already feeling it. You know the drill by now. Severe weather events keep hammering the insurance industry, driving up costs and making coverage harder to secure for coastal properties [Source].

The reality check: National average homeowner's insurance runs about $2,110 annually, but hurricane-prone areas? Expect significantly higher [Source]. Smart money is moving toward resilient construction. Alabama studies show homes built to Insurance Institute for Business and Home Safety "Fortified" standards experience fewer and less costly claims after storms [Source]. This isn't just about building better — it's about breaking the cycle of repeated losses that keeps crushing insurance availability and pricing [Source].

Something to consider: Factor resilience standards into your property evaluations now, before the next storm season makes the decision for you.

More You Should Know

• Fidelity Sues FinCEN Over Cash Rules: Fidelity National Financial is suing the Treasury Department and FinCEN to block a new rule requiring title companies to report detailed information on all-cash residential real estate transactions, arguing it's arbitrary, costly, unconstitutional, and exceeds FinCEN's authority. [Source]

• Thiel: Real Estate Catastrophe Looms: Tech billionaire Peter Thiel warns of a looming "catastrophe" in the U.S. real estate market, attributing it to inelastic supply and restrictive zoning laws that disproportionately benefit older generations of homeowners and landlords, a concern echoed by Federal Reserve Chairman Jerome Powell. [Source]

• Mortgage Applications Drop Again: Mortgage applications saw a second consecutive weekly decline, as escalating mortgage rates, influenced by a recent U.S. debt credit downgrade, dampened buyer demand. [Source]

• Price Right, Sell Fast: To achieve a successful home sale, real estate professionals must guide sellers towards accurate pricing strategies based on current market trends, as overpricing deters buyers and extends listing durations, according to a recent Realtor.com survey. [Source]

• Mortgage Rates Remain Elevated: As of May 28, 2025, mortgage rates continue to hover just below 7%, with the 30-year fixed-rate at 6.99% and the 15-year fixed-rate at 6.21%, primarily influenced by ongoing inflation, recession anxieties, and global trade concerns. [Source]

• Senior Housing Outpaces CRE: Driven by high demand and limited supply, senior housing occupancy is surging past 2008 levels, positioning it as a top-performing sector within commercial real estate and attracting significant investor interest. [Source]

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