As Q1 2025 wraps up, commercial real estate continues to reflect a marketplace in motion. While some sectors are finding stability, others are still adjusting to new economic realities, tenant behaviors, and investment strategies. Below is a quick snapshot of the major trends shaping CRE in March.
Industrial Sector: Sustained Demand. The industrial real estate market remains strong, fueled by continued e-commerce growth and demand for last-mile logistics and distribution space. While leasing activity is normalizing to pre-pandemic levels, warehouse lease renewals are becoming increasingly expensive for tenants. According to CBRE’s U.S. Industrial & Logistics Figures (Q4 2024), average asking rents reached $10.13 per square foot, a 61% increase from Q4 2019—a sign of both demand pressure and limited new supply in key markets. Source
Multifamily Sector: Stabilization in Progress. The multifamily sector is showing signs of stabilization. Vacancy rates are gradually rising, and construction has slowed for the seventh consecutive quarter, indicating a healthier market balance. While rent growth remains modest, demand aligns with pre-pandemic levels, suggesting a steady outlook for this sector. Source
The office sector continues to adapt to hybrid work models, with a growing focus on high-quality, sustainable spaces that foster collaboration and productivity. While demand remains uneven across markets, PwC’s Emerging Trends in Real Estate® 2025 notes that flight-to-quality trends are reshaping office leasing patterns, with companies seeking spaces that support flexibility and employee well-being. Source
Retail real estate is experiencing a resurgence, particularly in high-quality city destinations. Companies like Hammerson are undergoing transformations, focusing on premium assets. Despite reporting a £526 million loss in 2024 due to strategic divestments, Hammerson’s repositioning towards higher-quality city destinations has yielded positive results, with strong footfall, sales, leasing, and capital redeployment trends continuing into 2025. Source
Investor sentiment in commercial real estate (CRE) is cautiously optimistic. According to Deloitte’s 2025 Commercial Real Estate Outlook, over 68% of respondents expect conditions for CRE fundamentals to improve in 2025 across areas such as cost of capital, capital availability, property prices, transaction activity, leasing activity, rental growth, and vacancies. This reflects a significant boost in optimistic sentiment compared to the previous year. Source
Looking Ahead
The March 2025 CRE landscape highlights the importance of agility and informed decision-making. With industrial and multifamily sectors showing resilience, and office and retail continuing to evolve, the path forward lies in strategic adaptability.
For localized expertise and guidance tailored to your commercial real estate goals, connect with The Bill Gladstone Group of NAI CIR—your trusted partner in Central Pennsylvania.