U.S. Capital Markets Snapshot | August 2025

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

10 Minute Read​ | August 5, 2025

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Capital is Still in the Market — It’s Just Smarter

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Executive Summary

Despite interest rate turbulence and a high bar for underwriting, capital is actively pursuing commercial real estate—just with tighter discipline and higher demands. The era of “cheap, fast, and loose” has been replaced by a selective, strategic deployment of capital focused on recession-resistant sectors and value-accretive deal structures.

While headline numbers suggest a slowdown in transaction volume, that doesn’t mean capital is sitting idle—it’s simply waiting for the right sponsor, the right asset, and the right story.

Where Capital Is Flowing in 2025

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What Capital is Avoiding

• High-vacancy suburban office

• Over-leveraged value-add plays with unclear exits

• Tertiary market assets with flat rent growth

• Sponsors lacking track record or execution support

The underwriting bar is high. Assets must prove themselves via in-place income, tenant quality, or clear value creation.

Spreads, Rates, and Structure Trends

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Sponsor’s Playbook: What’s Working in 2025

• Pre-negotiated debt: Walking in with financing is a credibility booster

• Off-market acquisitions: Clean process, less competition, higher returns

• Sale-leasebacks: Liquidity unlock for sellers, stable yield for buyers

• Longer hold periods: Investors accepting 7–10 year horizons again

• Public-private deals: Especially in education, government, healthcare

Key Risk Factors Capital Is Pricing In

• Refinance risk (short-term bridge debt)

• Overstated NOI growth assumptions

• CapEx underbudgeting

• Local regulation / zoning shifts

• Weak sponsor experience / operational oversight

What This Means for Operators

Capital isn’t gone—it’s selective, sophisticated, and skeptical.

To win institutional money or high-net-worth placement:

• Your numbers must defend themselves

• Your story must be clear

• And your process must be buttoned-up

Deals are getting done—but only for operators who know how to sell risk-adjusted upside in a de-risked format.

Final Takeaway

We are seeing strong appetite for deals that are positioned right. Our clients are moving ahead—not by shouting louder—but by showing up smarter.​​​​​​​​​