Market Gains But Not Without Pain: 6 Predictions On What’s In Store For CRE Next Year

It’s been a tumultuous year for the commercial real estate industry, as companies spent months waiting for the interest rate cuts that finally arrived in September, and the market faced uncertainty around an election that is now poised to spark a substantial shift in federal policy.

Not everyone was able to survive to ‘25, but for those that did, things may be starting to turn around.

Bisnow spoke to several economists and market experts to hear their predictions for 2025, and they largely see clearer skies ahead, including falling vacancy in office and multifamily and a resurgence of investment.

On the flip side, some banks could see a “reckoning” as distressed assets increasingly become a major strain on balance sheets and lenders come to terms with write-downs. And there may be pain in the retail markets if more mergers lead chains to close stores.

• Office Vacancy To Start Decreasing...

• Banks To See More Write-Downs, Particularly From Office Loans...

• Multifamily Vacancy To Decline...

• New Administration To Boost Retail M&A, Spurring More Store Closures...

• Alternative Power Sources To See ‘Exponential Growth’ To Fuel Data Center Expansion...

• CRE Investment To See A Resurgence...

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RSK: I cannot say that I disagree with any of these predictions. The one that is troublesome is the retail occupancy. If there is a pent up demand for mergers, that could create a glut of retail space available.