The commercial real estate (CRE) sector enters 2025 against a combustive backdrop of domestic political shifts and global technological transformation. With the Trump administration’s second term ushering in significant policy changes and a global focus on the high-tech revolution—particularly in artificial intelligence (AI)—the industry faces both challenges and opportunities.
"If we see a relatively stable regulatory environment in 2025, that will boost corporate profits and should drive demand for commercial space," said SIOR Global President and managing principal at Cushman & Wakefield Minnesota, Mike Ohmes, SIOR. "Liquidity has returned, financing is stable, and equity is readily available—all clear indicators that 2025 could outperform previous years.”
Ohmes adds that the policies are designed to enhance corporate flexibility and investment, creating fertile ground for added CRE development and new investments. Indeed, Donald Trump’s return to the presidency has brought a renewed focus on corporate tax cuts and reshoring initiatives, both of which are expected to benefit the CRE sector.
In late January, for example, President Trump met with tech leaders from OpenAI, Oracle, and SoftBank to discuss initiatives for producing AI technologies domestically. This move aims to position the United States as a global leader in AI while fostering innovation and creating jobs in high-tech manufacturing. The meeting underscored the administration’s commitment to reshoring critical industries and reducing reliance on foreign supply chains, a strategy expected to stimulate demand for advanced industrial and office spaces tailored for tech development.
Additionally, the growing need for data processing and storage is driving demand for data centers across the U.S., further bolstering the industrial CRE market.
Saadia Sheikh, SIOR, a commercial real estate advisor specializing in tenant representation, noted that her corporate occupier clients are adapting their strategies to align with these economic changes. Companies are focusing on integrating operational efficiencies with workforce needs, prioritizing a balanced approach to location strategy, talent considerations, and workplace experience.
Technological advancements, particularly in AI, are reshaping CRE markets worldwide, with China at the forefront of this revolution. Bjarne Bauer, SIOR, managing partner at NAI Sofia Group in Shanghai, pointed out that China’s adoption of AI and automation is driving short-term demand for industrial space.
"China’s market has shown resilience, leveraging initiatives like the Belt and Road to pivot and strengthen partnerships," he says, adding that China is highly adaptable to a raft of new tariffs and trade policies that will primarily benefit the U.S.
The U.S. economy is poised for solid growth in 2025, with GDP expected to rise by approximately 2.7%, according to a January forecast from the International Monetary Fund (IMF). Additionally, sectors like technology and healthcare are projected to see above-average growth rates, further supporting CRE demand. This economic stability has bolstered investor confidence, with liquidity returning to the market and financing conditions stabilizing.
Certain CRE sectors are emerging as clear winners. Industrial and multifamily markets remain robust, supported by steady leasing activity and consistent investor interest.
"These asset classes continue to be the powerhouses of the industry," Ohmes said, citing strong fundamentals and favorable economic conditions.
By contrast, the office market continues to grapple with challenges. Companies are abandoning a one-size-fits-all approach, focusing instead on strategic site selection and creating environments that attract and retain top talent. Sheikh compared this shift to retail strategies, where user experience and location are paramount. High-performing properties in prime neighborhoods are expected to thrive, while others may face high vacancies and financial strain.
As the CRE sector adapts to this dynamic landscape, strategic decision-making will be crucial. Persistent challenges, including elevated interest rates and restrictive immigration policies, require innovative solutions. However, industry leaders are optimistic.
Sheikh added that companies are increasingly adopting a thoughtful approach to balancing economic priorities with workforce needs. "Your people cost 10 times your real estate cost," she emphasized, underscoring the importance of talent strategy in shaping CRE decisions.
Reflecting on the sector’s resilience, Ohmes concluded, "A couple of years ago, there was a saying: ‘Stay alive till 2025.’ Well, we’re not just alive—we’re positioned to thrive."
As 2025 unfolds, the CRE industry is poised to capitalize on new opportunities while adapting to ongoing challenges. With a combination of strategic planning, innovative thinking, and cautious optimism, industry stakeholders are ready to shape the future of commercial real estate.
