Published by Forbes.com | December 26, 2024
Increased interest in non-warehouse industrial properties, growing flexibility for life science facilities and more "we" office space are among CRE trends for 2025
There’s no doubt commercial real estate faces significant headwinds as we look toward another year. The office sector continued to struggle in 2024, while an evolving economic climate, the growth of experiential consumerism and the ongoing quest to find tenants all challenged owners.
Some saw 2024 as marking the conclusion of one economic cycle, with 2025 ushering in a new and more positive period for the sector. While the CRE outlook remains speculative, that hasn’t stopped those who monitor the industry from advancing a wide-ranging assortment of forecasts for the next 12 months.
Office up
The office market is likely to find stability in the year ahead, with improvement coming late in 2025, CBRE reports. A construction slowdown and occupier sentiment shifting toward expansion should spell a 5% increase in overall office leasing volume in 2025. CBRE sees prime office space – meaning each market’s best buildings – in shorter supply, leading to prime-office vacancy reaching pre-Covid thresholds of 8.2% by 2027.
Tech niche rising
CRE watchers wonder if surging demand for warehouses will be followed by interest in other types of industrial properties. It’s not just investment in data centers driven by the growth of AI. Cold storage facilities, EV battery plants and quantum computing campuses will also likely draw increasing consideration, despite challenges each faces.
Elected officials and community groups who might otherwise be opposed have been swayed by the far-reaching economic gains such properties are able to deliver.
Amplified in-office benefits
Though more employers are mandating their employees return to office, a smarter approach would be making the workplace more appealing, says Ariel Lumry, IIDA, senior interior project designer for Perkins&Will’s Dallas studio. Custom space that amplifies the emotional and psychological benefits of face-to-face connection nurtures community and fosters collaboration unachievable in the virtual realm.
Retail rents increase
A lack of new retail construction over the past several years, sending the national availability rate under 5%, will likely spark asking rent hikes in 2025, CBRE reports. Retailers will likely seek to lock in longer-term leases on favorable locations.
