Commercial Real Estate in 2025: Hurdles and Horizons

As we progress through 2025, the commercial real estate market exhibits a blend of challenges and opportunities across its various sectors. As the industry evolves, being a CCIM Designee provides industry professionals with the tools and insights needed to thrive amid challenges and capitalize on opportunities. The combination of advanced education, powerful technology resources, and access to a global network positions CCIMs as leaders who can expertly navigate this dynamic landscape.
January 17, 2025

Here's an overview of the current landscape and what industry professionals can anticipate:

Industrial Real Estate

The industrial sector remains robust, primarily driven by sustained demand for logistics and warehousing facilities. E-commerce growth continues to fuel this demand, although leasing activities are normalizing to pre-pandemic levels. Notably, warehouse lease renewals are becoming more expensive for tenants, with average asking rents in the U.S. reaching $10.13 per square foot in Q4, marking a 61% increase from Q4 2019. Despite a slight rise in vacancy rates to 6.7%, rental prices have not declined, indicating a tight supply environment. [i]

In the industrial real estate sector, CCIMs are equipped to analyze complex market data, enabling them to identify high-growth opportunities in logistics and warehousing. With rental prices rising and vacancies stabilizing, CCIMs can provide detailed financial projections and guide clients in securing properties that maximize returns. Using tools like the Site to Do Business (STDB), CCIMs can assess market trends, determine optimal locations, and mitigate risks associated with supply chain shifts and leasing costs.

Office Space

The office market is striving for stability amid evolving work patterns. CBRE reports that the sector is likely to find equilibrium, with improvements anticipated later in the year. [ii] Tenants are increasingly favoring high-quality, sustainable office spaces, prompting owners to upgrade properties to meet these preferences. [iii]

CCIMs’ training in evaluating property upgrades and financial feasibility will allow them to guide owners in enhancing assets to meet evolving tenant preferences. Additionally, the CCIM network provides access to peers and thought leaders who share insights on adaptive reuse projects and emerging workplace trends, helping CCIMs remain ahead of the curve.

Retail Real Estate

Retail properties are adapting to new consumer behaviors and economic conditions. While certain areas experience growth, challenges persist in regions heavily reliant on office worker foot traffic. Investors are utilizing advanced analytics to assess tenant mixes and traffic patterns, ensuring data-driven decision-making in this evolving sector.

In retail real estate, CCIMs excel in leveraging data analytics to assess tenant mixes, traffic patterns, and market demographics. STDB is a vital tool to generate reports and actionable insights that can guide investors in making data-driven decisions. Whether repositioning shopping centers or identifying ideal tenant types, CCIMs deliver strategies that enhance property performance and resilience in a shifting economic climate.

Investment Activity

Investment in CRE is poised for a rebound. CBRE anticipates that investment activity will increase by up to 10% in 2025, driven by greater confidence in the economy and improved rates of return on commercial properties.[iv]

Additionally, Deloitte's survey indicates that 68% of CRE executives plan to increase mergers and acquisitions activity in the next 12 to 18 months, focusing on enhancing technological capabilities and scaling operations.[v]

As investment activity begins to rebound, the comprehensive financial analysis skills of CCIMs will be invaluable. Whether evaluating mergers, acquisitions, or property portfolios, CCIM Designees can perform in-depth investment analysis and provide clients with clear guidance on maximizing returns. Their expertise in market research and forecasting ensures they are well-positioned to advise on long-term strategies, even amid economic uncertainty.

Strategic Considerations for Professionals

  • Embrace Technology: Leveraging advanced tools for market analysis and property management is becoming increasingly essential.
  • Focus on Sustainability: Investing in sustainable and high-quality assets aligns with tenant preferences and can enhance property value.
  • Monitor Economic Indicators: Staying informed about interest rate trends and economic forecasts will aid in strategic decision-making.

In summary, while the CRE market in 2025 presents certain challenges, it also offers significant opportunities for professionals who are adaptable and forward-thinking. By focusing on technology, sustainability, and strategic investments, industry participants can navigate the complexities of the current landscape. Ultimately, being a CCIM Designee in 2025 goes beyond technical knowledge. It’s about having the confidence to tackle complex transactions, the connections to access valuable opportunities, and the credibility to stand out as a trusted advisor. As the CRE market evolves, CCIMs are uniquely prepared to navigate challenges, seize opportunities, and deliver exceptional value to clients and stakeholders alike.