The office sector of commercial real estate struggled in 2024, and with an evolving economy in the US, 2025 could mark a new leaf for the industry, or could continue with the trends of the past year.
2024 was not an easy year for the office sector of the commercial real estate industry. With 2025 quickly approaching, experts are optimistic that certain parts of the industry could see an uptick in sales and trends.
According to a recent report from CBRE, the global leader in commercial real estate services and investments, the office market is likely to reach some stability with improvement towards the end of 2025.
Jeffrey Steele, a Forbes writer who’s covered real estate trends since 1991, wrote that “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.”
Commercial real estate experts also are skeptical if the increase in demand for warehouse properties will lead to other types of interest in the CRE sector. Large tech spaces including cold storage facilities, EV battery plants, and quantum computer campuses will likely see an increase in demand.
“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 at the Dallas studio of Perkins&Will.
Steele wrote that customized office spaces that garner a welcoming feeling of emotional support will benefit employers who are struggling to find workers who want to come into the office. That kind of support creates a feeling of community and collaboration.
CBRE also discussed how retail spaces are more limited currently, which is surprising to some experts who predicted a “retail apocalypse” from the rise in ecommerce.
“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. Retailers will likely seek to lock in longer-term leases on favorable locations.”
Demand is also predicted to grow for industrial buildings near the border of the US and Mexico. CBRE predicts that distribution facilities will be in demand along the border.
“Markets particularly affected should be San Antonio, Austin, Dallas-Fort Worth, Oklahoma City, Kansas City, Des Moines and Minneapolis,” CBRE reports.
Buyers in the office sectors are also prioritizing spaces with minimal outside noise, especially because of the rise in Zoom conference calls along multiple working sectors in the US.
“Our clients have found not every informal interaction with their colleagues is welcomed or beneficial,” says Doug West, studio creative director at TPG Architecture.
West discussed that the incorporation of sound-proofing and use of higher panels to separate open office spaces are becoming necessary.
While these trends in commercial real estate have proven to be unpredictable, many experts are optimistic to see how the trends will ideally improve real estate rates and the economy in general.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
