Commercial Real Estate Updates
DnG on September 2025 Fed Rate Cuts
By Deborah Naumovski & Gulshen Kaur of DnG Commercial Real Estate
Commercial Real Estate Agents, Los Angeles & South Bay
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South Bay, LA: El Segundo – Torrance – Inglewood – Hawthorne – Gardena
Greater Los Angeles: Santa Monica – Culver City – Marina Del Rey
Fed Rate Cuts Finally Came in September.
But What Does It Really Mean for South Bay Commercial Real Estate Sellers?
You've seen the headlines: the Federal Reserve finally cut rates in September 2025. But here's what the news isn't telling you and why having the right commercial real estate agent matters more than ever.
The Federal Reserve just delivered what markets have been expecting for months: a rate cut. After holding rates steady through nine consecutive meetings, Chair Jerome Powell and the Federal Open Market Committee finally moved, cutting rates by 25 basis points in September 2025. Wall Street celebrated, with markets pricing in a 100% probability of the cut weeks before it happened.
But if you're a commercial property owner in El Segundo, Manhattan Beach, Torrance, or anywhere across the South Bay, the real story isn't about celebration. The real key is understanding what this shift actually means for your building's value and your timeline to sell.
The Fed's Hidden Message:
Jobs Matter More Than Inflation
Here's what most headlines missed: this rate cut wasn't because inflation disappeared. In fact, inflation ticked up to 2.9% in August, with core prices still running at 3.1%. That’s well above the Fed's 2% target. So why cut rates when prices are still rising?
The answer lies in the labor market data that sent shockwaves through economic circles. The Bureau of Labor Statistics revealed that the U.S. economy added nearly 911,000 fewer jobs over the past year than initially reported. July's job growth was anemic at just 22,000 new positions, and weekly jobless claims just hit a four-year high.
Translation: The Fed is no longer fighting inflation as its primary battle. It's now defending the jobs market, even if that means accepting that 3% inflation might be the new 2%.
For commercial real estate investors and property owners, this represents a fundamental shift in how we should think about the market ahead.
What This Means for South Bay Commercial Real Estate Values
As a commercial real estate agent working daily with South Bay property owners, I've watched how national economic shifts ripple through our local market. The Fed's September rate cut signals several important changes for commercial property sellers:
Credit Markets Are Beginning to Thaw
While the Fed only directly controls short-term rates, this cut signals to lenders that borrowing costs should ease across the board. We're already seeing corporate bond issuance near record highs and credit spreads at their tightest levels in 18 years. For commercial real estate, this means:
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Buyer financing becomes more accessible: Investors who've been sitting on the sidelines due to high borrowing costs may re-enter the market
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Cap rate expectations could adjust: As financing costs decrease, buyers may accept lower cap rates, potentially boosting property valuations
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Deal volume may increase: The transaction freeze we've experienced in many South Bay markets could begin to thaw
The South Bay Advantage in a Shifting Market
Los Angeles County's South Bay has unique advantages that become more pronounced when national economic conditions shift. Our proximity to LAX, the Port of Los Angeles, and major aerospace and technology employers creates resilience that many commercial real estate markets lack.
Industrial properties in El Segundo and Hawthorne benefit from continued demand for logistics and distribution space. Office buildings in Manhattan Beach and Redondo Beach serve established businesses that aren't as vulnerable to economic volatility as startups in other markets. Retail properties in Torrance and Carson serve stable residential populations with consistent spending patterns.
When credit conditions improve, even modestly, these fundamental strengths position South Bay commercial properties to outperform many other markets.
Why Timing Still Requires Patience and Strategy
Here's where working with an experienced commercial real estate agent becomes crucial: this rate cut doesn't mean you should rush to market immediately.
The Fed's move addresses credit availability, but several factors still require careful navigation:
Inflation Pressures
Remain Real
Core inflation at 3.1% means operating costs for many businesses continue rising. Tenants are still feeling pressure on their margins, which affects their ability to commit to long-term leases or pay premium rents. Property owners need to understand how these dynamics affect their specific tenant mix and lease renewal prospects.
Market Psychology
Takes Time to Shift
Even with improved credit conditions, buyers and investors remain cautious. The commercial real estate market has been slow for good reasons — economic uncertainty, geopolitical tensions, and changing work patterns all created legitimate concerns. One rate cut doesn't immediately erase months of careful decision-making.
Local Market Conditions
Vary Significantly
A Fed rate cut affects Manhattan Beach office buildings differently than it affects Carson industrial properties. Retail centers in Redondo Beach face different tenant dynamics than mixed-use developments in El Segundo. Understanding these nuances requires local expertise and market knowledge that goes far beyond national economic trends.
Strategic Advantage:
Commercial Real Estate Agents
This is exactly why having the right commercial real estate agent matters more than ever. Anyone can read Fed announcements and economic reports. But translating those macro trends into actionable insights for your specific property requires deep local knowledge and experience.
At DnG Commercial Real Estate, we don't just track national interest rate movements; every real estate agent does that (or, at least they definitely should.) No, we also carefully analyze how those changes affect buyer, seller, and real estate investor behavior in the South Bay specifically. We know which investors are actively looking, what financing they're securing, and how they're adjusting their underwriting criteria as conditions evolve.
We Read Beyond the Headlines
While markets celebrated the Fed's rate cut, we're watching the details that matter for property sellers:
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Which lenders are actually reducing commercial real estate rates, and by how much
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How cap rate expectations are shifting among active South Bay investors
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Whether tenant demand is strengthening in specific property sectors
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How long it's taking properties to move from listing to closing in current conditions
We Time Your Market Entry Strategically
Selling commercial real estate is not about catching the perfect moment. Wise investors know it’s often wasteful to try to time the market perfectly. It's about positioning your property so that when conditions improve, you're ready to capitalize. This means:
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Preparing your property now while competition remains limited
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Understanding your buyer pool and what financing they're likely to secure
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Pricing strategically to attract serious interest without leaving money on the table
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Negotiating from strength by understanding market dynamics better than your counterparts
Looking Ahead: What to Watch for in the Coming Months
The Fed's September rate cut is likely just the beginning. Markets expect three more 25-basis-point cuts through early 2026, which could bring the federal funds rate down to 3.25-3.5%.
For South Bay commercial property owners, this creates a window of opportunity, and it’s one one that requires careful navigation. As credit conditions continue improving, we expect to see:
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Increased buyer activity as financing becomes more attractive
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Gradual improvement in deal volume as both buyers and sellers gain confidence
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Potential compression in cap rates for well-positioned properties
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Renewed interest in value-add opportunities as investors regain access to development financing
Your Next Steps as a Commercial Property Owner
If you own commercial real estate in the South Bay and have been considering a sale, now is the time to start preparing, but without rushing. The Fed's rate cut signals that conditions are beginning to shift in favor of increased transaction activity, but success will still require strategy, patience, and local expertise.
The most successful sellers in the coming months will be those who:
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Understand their property's position in the current market
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Prepare their buildings to show well when buyer activity increases
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Work with commercial real estate agents who understand both macro trends and local dynamics
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Price strategically to attract serious buyers without undervaluing their assets
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Remain patient while positioning for optimal timing
Why DnG Commercial is Your Strategic Key
Deborah and Gulshen treat your property sale as if it were our own investment. We don't just wait for market conditions to improve; we help you understand when and how to position your building for maximum value.
Commercial Real Estate Agents Deborah Naumovski and Gulshen Kaur (aka DnG) bring almost 20 years of combined experience in the South Bay commercial and residential real estate markets. We've guided property owners through multiple economic cycles, and we understand how national trends translate into local opportunities.
When you work with Deborah and Gulshen, you're not just getting commercial real estate agents. You're getting strategic partners who read through the economic noise, understand what the Fed's moves really mean for South Bay properties, and help you make decisions with confidence.
The Fed's rate cut is just the beginning of what could be a significant shift in commercial real estate markets. Make sure you're positioned to benefit from it.
Ready to discuss how current economic trends affect your commercial property strategy? Call Deborah Naumovski or Gulshen Kaur at (310) 999-1203. We're here to help you make sense of the data and make decisions with confidence.
Deborah Naumovski and Gulshen Kaur are commercial real estate agents who provide strategic guidance for commercial and residential property owners throughout Los Angeles' South Bay. Our experienced team combines economic analysis with local market expertise to help clients achieve their investment goals in El Segundo, Manhattan Beach, Torrance, Redondo Beach, Hawthorne, Carson, and surrounding communities. DnG is the Key.