The Commercial Real Estate Market: What Is in Store for 2025?
The commercial real estate (CRE) market seems to be experiencing a prolonged case of “long COVID.” While the residential market boomed during and after the pandemic, with home prices surging until mortgage rates doubled in 2022, CRE didn’t see the same gains. Residential sales volumes have dropped by about a million units annually since 2021, though prices have continued to climb nationally. In contrast, CRE sales peaked in late 2021 and have declined steadily, with prices falling 6.5% overall since then – though results vary widely across sectors.
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The Industrial sector saw prices rise nearly 19% over the past three years, while the Office sector experienced a 21% drop, with Central Business District office values plunging over 50%.
Recent data suggests a slight improvement in prices and sales volume. But does this signal a recovery? The answer is more complex. To better understand these dynamics, we’ll examine overall Commercial Real Estate rends and the performance of its key sectors.
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