What’s In Store For CRE Investment In 2025
As 2025 approaches, business leaders are focusing on potential opportunities for the upcoming year. For commercial real estate investors, there is cautious optimism that new prospects will emerge, even though transaction activity has slowed throughout 2024.
According to Ashley Fahey, editor of The National Observer: Real Estate Edition, the national commercial real estate market saw $40.1 billion in transactions during the third quarter of 2024. This marks a decline from $43 billion in Q2 and $44.4 billion in Q3 2023, as reported by Altus Group. While transaction activity has slowed, the pace of this decline has moderated, particularly on a year-over-year basis. Notably, 10 of the 15 property types tracked saw an increase in price per square foot in Q3, including mixed-use, manufacturing, automotive, and office properties.
“Transaction activity effectively begets transaction activity,” explained Cole Perry, associate director of research at Altus Group. “The trend I’m seeing is a continuation of the slowdown. Transaction volume is still down year-over-year, price discovery remains a challenge, but there are signs it’s starting to pick up.”
Perry further noted that the market has entered a “new normal,” where both buyers and sellers are adjusting to a lack of comparable sales. Additionally, industry participants are trying to gauge how the policies of President-elect Donald Trump and a Republican-controlled Congress may impact the economy. While many remain hopeful that the incoming administration will bring deregulation or tax cuts, there are concerns that Trump’s campaign promises on immigration and tariffs could lead to inflation and increased economic uncertainty.
Source: SFBJ
