As Q4 kicks off, the market is signaling a shift.

September’s 25 bps rate cut—the first in over a year—has real implications. Inflation is cooling, capital markets are showing early signs of life, and multifamily valuations are starting to react.

For private equity sponsors, it’s a moment to recalibrate. The opportunity isn’t just to survive the transition—but to move strategically while others pause.

The key question: Are you positioned to act with confidence as the market thaws?

What the Rate Cut Signals

The Fed’s move isn’t a green light—it’s a yellow one. But it does lower borrowing costs and introduces new optionality into deal-making.

Quick Impacts:

• Debt Is Loosening: Lenders are showing more willingness—especially for stabilized, cash-flowing assets.
• Valuations May Stabilize or Rise: Lower financing costs could support cap rate compression in select markets.
• Caution Still Prevails: Lenders and equity are chasing fewer, higher-quality deals. No room for weak sponsorship or thin theses.

Capital Is Returning—But with Strings Attached

There’s fresh capital on the table, but it’s not chasing every deal. Investors and lenders want clarity, quality, and control.

Where Capital Is Flowing:

• Strong Operators: Those with disciplined asset management and a track record of execution.
• High-Growth Markets: Sunbelt cities and resilient secondary markets remain investor favorites.
• Creative Capital Structures: Preferred equity, mezzanine debt, and recapitalizations are filling gaps and unlocking deals.

CF Capital Insight: Sponsors who proactively shape their capital stack—and show clear, data-backed readiness—will get the first calls.

Exit Strategy: Optionality Matters

Buy-side activity is picking up, but the bar remains high. Full exits, partial recaps, and structured liquidity all demand precision.

Sponsors Winning in Today’s Market Are:

• Accepting that 2021-style pricing is gone—and adjusting accordingly
• Doubling down on operations to drive NOI and reduce vacancy
• Exploring partial exits: earn-outs, minority recaps, or hold-and-optimize structures

Even if you’re not planning to sell in Q4, your asset should be ready for review. Liquidity favors the prepared.

Three Strategic Priorities for Q4

1. Refine Your Forecasts
   Model multiple rate paths. Stress-test your cap rates, DSCR, and exit timelines to protect your downside.
2. Engage Capital Partners Now
   Transparency matters. Share your plan early. Be the sponsor who’s already underwritten the scenario others are just starting to think about.
3. Get Your Portfolio Investor-Ready
   Clean reporting, solid leasing, and operational stability are what capital is buying. Polish your fundamentals.

The Bottom Line

The Fed didn’t just fix the market—it reset it. Now, execution is the difference between standing still and scaling up. We’re built for this cycle.

At CF Capital, we’re executing with clarity: sourcing smart capital, strengthening operations, and positioning assets for whatever the next 12 months bring.

Want to sharpen your Q4 strategy?

Let’s talk: cfcapllc.com/contact