As we turn the corner from years of uncertainty, the commercial real estate (CRE) industry is poised for a potential rebound in 2025. Deloitte's latest report highlights key trends and actionable insights for leaders to capitalize on this generational opportunity.

Key Report Projections:
• Economic Stability: Slower but steady global growth, with inflation cooling and interest rates potentially falling. However, elevated borrowing costs and refinancing risks remain, with nearly $500 billion in U.S. CRE loans maturing in 2025, creating significant challenges in the capital markets.

• Renewed Optimism: 88% of CRE leaders expect revenue growth in 2025, with 60% projecting increases over 5% year-over-year. Budgets are shifting, with 81% prioritizing technology and data investments to drive innovation.

• Sector Opportunities: Multifamily, industrial, logistics, and data centers emerge as top-performing sectors. Conversely, the office sector faces continued challenges with higher-than-average vacancies and limited transaction activity.

• Capital Market Trends: 68% of respondents expect financing to become less expensive and more accessible in 2025, marking a major sentiment shift from previous years. This optimism is tempered by risks like rising cost of capital and evolving tax policies, such as the global minimum tax.

• Sustainability Imperatives: Deep energy retrofits and climate-resilient strategies are increasingly linked to financial performance. 76% of CRE leaders plan to undertake these initiatives within the next 12-18 months.

• AI and Digital Transformation: Generative AI adoption is on the rise, with 40% of companies already implementing early-stage solutions to streamline decision-making and enhance property operations.

• Talent Revolution: With 40% of the U.S. CRE workforce nearing retirement in the next decade, leaders must invest in upskilling and aligning company culture with next-gen values like sustainability, mental health, and technology.

What's Next?
2025 offers a chance to pivot from defensive strategies to proactive investments, leveraging technology, sustainability, and talent for growth. CRE leaders prepared to navigate this transformation could find themselves well-positioned to seize market opportunities.

What do you think will shape CRE the most in 2025?

https://www2.deloitte.com/us/en/insights/industry/financial-services/commercial-real-estate-outlook.html