CPE Executive Council: What Will Be the Biggest 2025 CRE Trend?
With 2024 coming soon to a close, the CPE Executive Council predicts what to watch out for in the coming year.
Running the Gamut
Hybrid Work and Office Space Demand: The hybrid work model, which became more prevalent during the pandemic, will continue to influence office space demand. Companies are likely to seek smaller, more flexible workspaces with modern amenities and sustainable building practices.
Industrial Real Estate Growth: The ongoing boom in e-commerce will keep driving demand for industrial properties, especially those near major transportation hubs. Warehousing, last-mile distribution centers, and cold storage facilities will be particularly sought after.
Sustainability and ESG Initiatives: Environmental, Social, and Governance (ESG) considerations will become even more integral to investment decisions. Buildings with sustainable designs, energy-efficient systems and eco-friendly materials will be more attractive to tenants and investors.
Shifts in Retail Spaces: The retail sector will continue to evolve, with a focus on experiential retail. Traditional brick-and-mortar stores may downsize or close, while malls and shopping centers are repurposed into mixed-use developments that combine residential, office, and entertainment spaces.
Technology Advancements: Technologies like Artificial Intelligence (AI), Big Data, Virtual Reality (VR) and the Internet of Things (IoT) will revolutionize operations in commercial real estate. These advancements will enhance efficiency, tenant experience, and property management.
These trends reflect a broader shift towards flexibility, sustainability, and technological integration in the commercial real estate sector. —Doug Ressler, Manager, Business Intelligence, Yardi
Distressed Assets
My gut says we are going to see an onslaught of distressed multifamily assets in poor physical condition resulting from mismanagement and lack of capital/operating funds. –Josue Garza, President of Property Management, Lynd
Office Supply Reduction
I think the biggest trend in 2025 will be the reduction of office supply as older, under utilized properties get converted to other uses. I also think we will see a new crop of office investors that acquire buildings at a discount that will be able to offer much more favorable lease rates. We are seeing some of this now but I think we will see this trend increase in 2025.—Dave Ebeling, Owner, Ebeling Communications
Interested in joining the CPE Executive Council and being featured in future articles? Email Jessica Fiur.
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