U.S. Commercial Real Estate Report
Compiled by Park Industrial

10 Minute Read​ | July 1, 2025

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I. Executive Summary​

The U.S. commercial real estate (CRE) market is navigating a period of measured growth and selective opportunity. As of 2025, the market is projected to reach $25.79 trillion in value, with consistent 2.22% annual growth forecasted through 2029 (Statista). While macroeconomic headwinds persist, fundamentals across several sectors are stabilizing, and smart capital continues to pursue value—especially in long-view plays like industrial and multifamily.

 

At Park Industrial, we believe strategic clarity is the edge. Whether you’re buying, selling, holding, or repositioning assets, the ability to interpret sector-level shifts ahead of the curve is what separates success from stagnation.

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II. National Market Overview

• Total Market Value (2025): $25.79 Trillion

• Projected Market Value (2029): $28.16 Trillion

• Growth Rate: 2.22% CAGR

 

While the overall CRE market is expanding, this growth is not evenly distributed. Winners are emerging based on asset class, location, and adaptability to current demand drivers.

 

III. Sector Performance Breakdown

Industrial

Status: Market Leader

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Drivers:

• E-commerce demand

• Logistics hubs + last-mile distribution

• Surge in data centers and cold storage

• Nearshoring and reshoring of supply chains

 

Insight:
High absorption rates continue to push industrial rents up in key logistics corridors. Institutional capital is aggressive in this space, and cap rate compression is still evident in top markets.

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2025 Opportunity:
Vacant big-box spaces near transit and infrastructure corridors are being scooped up for adaptive reuse or fulfillment center conversions.

 

Office

Status: Stabilizing

 

Trends:

• Hybrid work reshaping footprints

• Flight to quality (Class A outperforming Class B/C)

• Flexible space and amenity-driven design becoming standard

 

Insight:
Although vacancy remains elevated in major metros, leasing activity is returning—slowly. Long-term success will be dictated by proximity to workforce hubs, lifestyle integration, and adaptability.

 

2025 Opportunity:
Core-plus and value-add repositioning in suburban nodes with strong demographics.

 

Retail

Status: Mixed but evolving

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Strong Performers:

• Neighborhood centers

• Medical retail

• Experiential and service-based tenants

 

Lagging:

• Big-box formats

• Malls without redevelopment plans

 

Insight:
Retail is seeing a redefinition, not a collapse. Centers anchored by grocery, healthcare, and entertainment are outperforming. Retail tied to community function is back on the rise.

 

2025 Opportunity:
Repositioning underperforming assets into mixed-use or service-based hubs.

 

Multifamily

Status: Resilient, with pricing pressure
 

Key Trends:

• Institutional capital still pouring in

• Rising construction costs and debt service affecting yield

• Rent growth normalizing

 

Insight:
Multifamily remains the most liquid asset class, but new underwriting standards and cautious lending are recalibrating valuations. Developers are delaying starts or pivoting to build-to-rent formats.

 

2025 Opportunity:
Secondary markets with job growth and constrained housing supply will outperform.

 

IV. Macroeconomic & Capital Markets Context

• Interest Rates: Elevated but expected to level off mid-2025

• Lending: Tighter credit conditions; creative financing is critical

• Institutional Capital: Continuing to rotate into hard assets with long-term upside

• Inflation: Normalizing but still impacting construction and operating costs

 

Strategic Consideration:
Deals now require deeper diligence and stronger fundamentals. Underwriting must include real risk premiums and anticipate holding longer to achieve value creation.

 

V. Key Takeaways for 2025 Strategy

• Industrial and multifamily are still the most attractive long-term plays.

• Office and retail repositioning is viable but requires precise execution.

• Capital is cautious, but not absent—deals must show true upside.

• Understanding the approval environment (especially in public-sector deals) is a critical differentiator.

 

VI. Final Word: Insight = Leverage

In this cycle, timing and precision will matter more than volume. There’s capital on the sidelines and market movement is happening—but execution will determine outcomes.

 

At Park Industrial, we position our clients to win by combining real-time insight, strategic positioning, and end-to-end transaction expertise.