LightBox CRE Activity Index Dips Amid Tariff Turbulence and Market Uncertainty

IRVINE, Calif., June 5, 2025 /PRNewswire/ -- LightBox, a leading provider of commercial real estate (CRE) data and technology, reported the first decline of 2025 in its CRE Activity Index, which fell slightly to 105.5 in May from 109 in April—a clear sign that early-year momentum is beginning to taper amid rising economic and geopolitical uncertainty.

Despite the month-over-month decline, May's Index remains 22% higher than one year ago, underscoring a market that continues to move forward—albeit at a more measured pace. The pullback reflects mounting caution among lenders and investors as the CRE market adjusts to the ripple effects of new tariffs, persistent inflation concerns, and evolving interest rate expectations.

"After a fast start to the year, May's Index confirms that the market is starting to tap the brakes," said Manus Clancy, head of Data Strategy at LightBox. "The investment community isn't retreating, but it is recalibrating. Lenders are becoming more selective, and underwriting timelines are stretching out as everyone reassesses risk."

The LightBox CRE Activity Index measures national activity across commercial property listings, environmental due diligence, and appraisals—three functions that underpin CRE transactions and serve as a leading indicator of market velocity. The Index is normalized to account for business day variations and seasonality.

In May, the three core components of the Index moved in divergent directions:

• Commercial property listings rose 1% from April and 47% year-over-year, showing continued seller engagement.
• Phase I environmental site assessments (ESAs), a key signal of lender and buyer due diligence, were flat month-over-month but up 7% from last May.
• Lender-driven commercial appraisal volume dropped 19% from April and 12% below year-ago levels—marking the most notable sign of cooling deal velocity.

"The sharp drop in demand for commercial real estate appraisals signals a clear shift toward lenders taking a more cautious posture," said Dianne Crocker, research director at LightBox. "Appraisal activity closely tracks capital slow, so this pullback is an early indicator of tightening lender sentiment."

While environmental due diligence remains steady, and listings continue to rise, the report notes the slowdown in valuations is consistent with broader indicators of a moderating cycle. Inflation signals have been mixed, interest rates remain elevated, and growth forecasts for the second half of 2025 are being revised amid tariff-related uncertainty.

"Deals are still closing, but market participants report more drawn-out negotiations, wider bid-ask spreads, and intensified risk assessments," said Clancy. "Investors are pursuing opportunities, especially in high-quality urban assets and distressed scenarios, but the bar for underwriting and capital deployment is getting higher."

The May Index also arrives as broader macroeconomic sentiment remains in flux, the report states. The Fed's preferred inflation gauge, the PCE, came in below expectations, easing fears of runaway inflation. However, the commentary highlights that lenders and investors continue to weigh a complex mix of variables—from construction costs and tenant demand to looming CRE loan maturities and global economic pressure.

"As the market absorbs the initial shock of tariffs and adjusts to heightened volatility, the next few months will reveal whether this is a brief pause or the beginning of a more sustained slowdown," said Crocker. "June's Index will be critical in determining which way the momentum is headed."

Explore the full May CRE Activity Index numbers

About LightBox

At LightBox, we are at the forefront of delivering advanced and precise solutions for commercial real estate intelligence. Our dedication to innovation propels real estate professionals forward by providing them with the essential tools required to navigate complex decisions, minimize risk, and boost productivity across the spectrum of real estate operations. LightBox is renowned for its commitment to promoting excellence and fostering connections in the industry, serving an extensive clientele of over 30,000 customers. Our diverse client base spans commercial and government sectors, including but not limited to brokers, developers, investors, lenders, insurers, technologists, environmental advisors, appraisers, and other businesses that depend on geospatial information. To discover more about how LightBox can illuminate the path to informed real estate solutions, visit us at: www.LightBoxRE.com

Media inquiries: media@lightboxRE.com

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