Commercial Real Estate Activity Rose Across Several Market Metrics
The Federal Reserve Bank of Kansas City released its KC Fed Commercial Real Estate (CRE) Index today. The value of the index showed a moderate increase from 0.21 to 0.52 during the second quarter of 2026.
“Most indicators in the KC Fed region’s commercial real estate markets pointed to growth for the sector over the past quarter,” according to Nicholas Sly, vice president at the Federal Reserve Bank of Kansas City. “Capital to support property sales and other transaction activity continued to flow, and several locations in the KC Fed region saw a pick-up in construction and development activity.”
Chart 1: The KC Fed CRE Index continued its upward trend over the past several months
Note: An index value of zero corresponds to overall conditions being at their historical average and differences from zero are measured in terms of standard deviations from the historical norm.
Table 1: Individual drivers of overall change in the KC Fed CRE Index
Notes: Contributions may not add to the total change in the index due to rounding. The contribution of each metric is calculated as the change in the standardized value of the variable from the previous quarter multiplied by the coefficient of the variable in the index.
Chart 2: Alignment in market participants’ views about CRE conditions continued to rise
Note: Values correspond to measures of Shannon entropy, with higher numerical values indicating more mixed responses and lower signal quality of the KC Fed CRE Index. Index shown inverted.
The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.
Authors
Nicholas Sly
Vice President, Economist, and Denver Branch Executive
