The commercial real estate (CRE) markets have gone through some pretty significant changes over the last few years. Since early 2020, the industry has faced wave after wave of disruption — and as we move deeper into 2025, the market continues to evolve in ways that investors, developers, and lenders need to pay close attention to.

In this week’s video, we broke down the latest data and headlines affecting the four major commercial property types — Office, Industrial, Multifamily, and Retail — and took a closer look at how the recent news around tariffs could shape the CRE landscape for the rest of the year. Here’s a quick recap:

Office: The Struggle Continues

The shift to remote and hybrid work models has fundamentally changed how companies use office space. Vacancy rates have climbed in major markets, sublease availability is at record highs, and landlords are offering aggressive concessions just to keep tenants in place. While some markets have seen a modest return to the office, overall transaction activity remains muted, and pricing continues to adjust downward as cap rates expand.

Industrial: Supply Growth Catches Up

For years, industrial real estate was the darling of the CRE world, fueled by the e-commerce boom and pandemic-related demand for logistics space. But after record levels of new supply delivered in 2023 and early 2024, vacancy rates are starting to rise in key distribution hubs. Rental growth has decelerated, and investors are becoming more selective as they weigh increased construction costs against softening tenant demand.

Multifamily: Pressure on Rents and Values

Multifamily has also faced a unique set of challenges. Rapid interest rate hikes since early 2022 put upward pressure on cap rates, while record-high levels of new apartment supply in markets like Austin, Phoenix, and Atlanta have started to outpace demand. Rent growth has flattened in many metros, and transaction volume has slowed significantly as buyers and sellers struggle to align on pricing in the face of higher financing costs.

Retail: Resilience in the Face of Uncertainty

Surprisingly, retail has held up better than many expected. Well-located neighborhood centers, grocery-anchored assets, and experiential retail concepts have seen steady demand, while newer retail developments remain limited due to elevated construction costs and tighter lending standards. Vacancy rates have remained relatively stable, and many investors are starting to see retail as a defensive play in an uncertain market.

How Tariffs Could Impact CRE in 2025

Adding another layer of complexity to the market is the recent news surrounding potential new tariffs on imported goods. These tariffs could push up the cost of construction materials, appliances, and building systems — creating further headwinds for new development and major renovation projects. Additionally, higher import costs could affect consumer spending and supply chain dynamics, which would ripple through both the industrial and retail sectors in particular.

Final Thoughts

The commercial real estate markets are navigating one of the most complex environments we’ve seen in decades. With shifting tenant demand, changing capital markets, and new geopolitical risks in play, it’s more important than ever to stay informed and agile.

If you’re an investor, developer, or lender trying to make sense of where the opportunities and risks lie in 2025, be sure to check out this week’s video for a deeper dive into the latest market trends and data.