Heading into 2025, market signals remained mixed, with a modest M&A recovery gaining momentum even as long-term rates climbed back toward mid-summer levels following their initial post-Fed-cut decline, and corporate bankruptcies on pace to reach a fourteen year high after a prolonged period of elevated interest rates. Middle-market business valuations continued to soften relative to recent years, widening the arbitrage between business and real estate multiples and supporting increasingly attractive sale leaseback opportunities across a range of industry sectors. How the dueling forces of a more favorable M&A climate and potentially higher long-term rates would ultimately balance out remained an open question heading into the new year.
