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n the second quarter of 2025, the economy showed resilience despite unchanged monetary policy. Consumer spending and declining imports drove this momentum, while inflation edged up to 2.7% and job growth continued. Commercial real estate trends remained relatively stable, with some sectors experiencing minor changes.

    Office Properties saw a decline in absorption, pushing vacancy rates to 14.1%, as tenants hesitated to commit to leases due to economic uncertainty. Landlords became more competitive on pricing, slowing annual rent growth to 0.6%. Class A offices posted positive absorption for the second quarter but saw vacancy climb to 20.5%.

    Multifamily Properties showed early signs of stabilization, with net absorption up 20% year-over-year and new completions down 9%. Vacancy held at 8.1%, and rent growth remained modest at 0.9%. Class B properties led demand with stronger rent gains.

    Retail Properties experienced weakened demand, with 12-month net absorption falling to -3.9 million square feet. However, retail currently holds the fastest rent growth and lowest vacancy rate among CRE sectors. General retail maintained positive absorption in Q2, while neighborhood centers and malls posted significant losses.

    Industrial Properties saw a post-pandemic surge cool down, driven by oversupply and softer demand. Net absorption dropped 39% year-over-year to a decade-low 79.7M SF, pushing vacancy up to 7.4%. Rent growth slowed to 1.7%, falling behind retail as the fastest-growing CRE sector.

    The hospitality industry remained stable, with occupancy at 63.0% still below pre-pandemic norms due to remote work and reduced corporate travel. However, ADR and RevPAR have surpassed 2019 levels, driving a rebound in profitability. Hotel transaction activity has eased as investors await clearer signs of sustained demand.