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What Commercial Real Estate Needs to Know Closing Out 2025

KEY ISSUES:

• Real estate in all sectors is seeing a decline
• Last quarter of 2025 will see a lower than estimated GDP
• Interest rates will not effect the market as much as anticipated
• AI, Data mining and quantum computing showing strong growth to infrastructure
• Retail showing resilience in the commercial real estate industry

Outlook on Commercial Real Estate

We thought focusing on commercial real estate would be a good niche to discuss. Closing 2025 we’ve seen many trends and want to highlight some shaping the market today. With an estimated 10% increase this year focusing 20% for office-property sales. Rental growth has been on the rise over 2025 rather than sales. But with markets stabilizing, the ‘One Big Beautiful Bill Act’ is favorable for real estate. CBRE, the largest team in commercial real estate, estimated an annual GDP growth of 1.5% in January 2025. Heading towards the end of the year here is what we’ve heard about the industry trends closing out 2025 ().

Lower Interest rate optimism

Seeing the fed interest rate cuts could potentially boost commercial real estate. Not kick-starting the industry, over time professionals are already pricing over the potential of cuts to come. While some are optimistic, most are wary due to the floundering labor market. While President Trump has been bombarding the social media angle calling for larger cuts the FED has held firm. Nothing about rate cuts have shown direct cause and effect, meaning it would not really have the expected change. Some sectors, unexpectedly, are showing more activity than others. Industrial and multifamily are seeing the reintroduction of investors and developers seeing more opportunity to move on deals coming in future months.

Data Centers are taking the lead in hot property investments

Within the commercial real estate industry CBRE has reflected on the impact of data centers. Why data centers you may ask? Thanks to the introduction of artificial intelligence, cloud computing and the overly popularized digitization in all industries across the board. All companies are seeing the increased need for more server space than ever before. This growth has translated into one of the largest booms in investments into the industry niche. The infrastructure taken to complete these projects is massive and is a benefit to the small towns of where they are located. With the backing of CBRE this industry is looking strong for investment heading into 2026.

Retailers are showing durability through a rocky 2025

Real estate is always evolving across the board. Unchanged throughout time remains the retail sector. Opposite to predictions since the early 2010’s it has been shown that retailers continuously evolve and change with the times. This being in a response to consumers buying habits and the needs of store ownership. Even with the closure of many big box retailers and other major national retailers following Covid, retail remains a constant strong hold in the commercial sector. Even with the inflation rates being as such overall outlook is still healthier than expected. Also, new trends such as the introduction of mixed space building of office, residence, retail and restaurants have become a successful adaptation over the past few years.

What other national, regional and local trends that matter

From what we see the most critical advice we can gather on the residential is to make sure to consult local experts. Buying and selling real estate in such markets like Boise, Idaho, remain relatively consistent. This is because, from what we see in data, the market did not take as bad of a hit with new constructions projects still happening. This partly because property owners are remaining conservative with their investments. Boise has led to a more balanced marketplace rather than high vacancy rates. Having the knowledge of all markets is beneficial due to the fact one does influence the other. No matter what is happening around the country you need to know what is happening.

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