It was all but inevitable last week that the Federal Reserve would make its first rate cut of the year, and the decision came as no surprise to the commercial real estate sector. Still, after holding its collective breath for nine months, the industry let out a sigh of relief at the decision. Interest rates and the cost of capital have been the looming giant in the heads of commercial real estate decision-makers this year, and transaction volumes had already started to tick up ahead of the widely expected 25-basis-point cut to the federal funds rate. “A quarter of a percent is probably not going to take something that's severely underwater and now enable it to be refinanced,” said Noah Bilenker, a partner in Goodwin’s Real Estate group, to Bisnow. “But when the denominator is large enough, they can have meaningful impacts.” But there are only so many massive properties, and loan delinquencies across all types of real estate debt have climbed in 2025.