A New Dawn For CRE Investing?
This year marks a fresh start for commercial real estate investment, with both opportunities and challenges ahead, according to LaSalle Investment Management’s 2025 Global Outlook.
Bright spots include growing investor optimism, prices aligning with bond yields, easier access to debt, and lower short-term interest rates. However, dark clouds such as geopolitical uncertainty, lower transaction volumes, and high long-term interest rates remain.
Brian Klinksiek, LaSalle’s global head of research and strategy, noted that while investor sentiment is positive, “the sky is looking a little gray.” The outlook reflects expectations of a soft landing for the U.S. economy and more accessible capital, though transaction activity remains slow. Despite this, distressed property volumes are far lower than during the Global Financial Crisis.
The office sector is especially troubled, with falling prices and rising vacancy rates. However, LaSalle sees opportunities in targeted markets. Jeff Shuster, president of LaSalle Value Partners US, advised that opportunities will arise in the office sector if investors choose the right locations.
Other promising investment sectors include medical buildings, industrial outdoor storage, and flex logistics spaces. While industrial demand is mixed, retail investments require selectivity due to a surge in construction starts. Even in the office market, well-located, modern properties with strong tenant rosters offer potential. Notable areas include Culver City in Los Angeles and Fifth Avenue in Manhattan.
Source: CPE
