Debt Is Cheap. Conviction Is the Scarce Resource

CRE transaction volume fell 33% in April from the prior year.

That's not a capital problem. That's a confidence problem.

What's Happening

JLL's Global Bid Intensity Index, which tracks how many buyers are pursuing acquisitions, has been roughly flat for two years. Lenders are pushing harder than ever. Buyers aren't matching them. First-quarter CRE investment across the Americas jumped 25% year-over-year to $113 billion. Then April volume dropped 33%.

Investors can't see clearly enough which assets will actually perform. That's the real constraint.

CoStar's updated forecast adds useful texture. Office vacancy fell to 14% in Q1 but is expected to hold flat for the rest of 2026 — even as inventory shrank by more than 111 million square feet in Q1 alone. Supply is falling. Vacancy isn't following. Because demand doesn't distribute evenly. It concentrates in specific buildings and stays put. The rest of the market holds its vacancy regardless of how favorable the debt environment gets.

Cheap debt plus uneven demand is exactly the environment that separates good underwriters from wishful ones.

Look at what's happening across our portfolio over the past 30 days compared to the prior 30. Outdoor space bookings up more than 50%. Kitchen reservations up 30%. Small conference rooms up nearly 10%.

The other column: conference hubs down 35%. Event space down 34%. Quiet spaces down 17%.

That's the CoStar story playing out at the space level. Some spaces are getting activated — outdoor, social, collaborative. Others are declining — individual, isolated, passive amenities. The buildings where the first column is growing are the ones tenants are choosing, not just occupying. The ones where both columns are flat or declining are the ones where CoStar's vacancy holds regardless of supply.

Why It Matters

Leesman has been measuring the employee side of this for over a decade, across more than a million workplace survey responses. The average office scores 69.5 on the Leesman Index. The average home scores 79.5.

That 10-point gap is why vacancy doesn't fall evenly when supply contracts. Buildings that have closed the gap are absorbing demand. Buildings that haven't are holding their vacancy regardless of what lenders offer. CoStar's forecast isn't surprising if you understand what's actually driving tenant decisions. The supply math doesn't override the experience math.

A tenant who books the outdoor space, shows up on days they aren't mandated to, and uses the common areas has found value in the building. A tenant who badges in and badges out with no bookings, no activation is one portfolio review away from asking whether they need the space at all. Those are two completely different assets with the same address.

Leesman's Q4 2025 survey of 129 senior CRE leaders found that 65% still say they haven't gotten hybrid right. 56% have formal attendance mandates. Only 35% say their approach is actually working. The mandate isn't the strategy. What happens inside the building is.

What to Do

If you're on the capital markets side: ask for the booking data. Not badge counts. Not occupancy percentages. The composition of what tenants actually reserve — whether outdoor and social activation is trending up or down, whether gathering spaces are used or dark — tells you more about renewal probability than the rent roll does. JLL says lenders are offering better terms than any point in recent memory. The buyers who can underwrite with confidence will get the best of those terms.

If you're on the operations side: your behavioral data is your investment thesis. JLL's new liquidity cycle means capital is looking for a home. But conviction requires proof. The proof is in the booking data, not the vacancy rate.

Anyways. Money isn't the constraint in CRE right now. Knowing which buildings are worth the bet is. The behavioral data answers that question. Most investment committees haven't asked for it yet.