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LA Piper's 2025 Real Estate State of the Market Survey reveals a mixed outlook for commercial real estate, with leaders expressing both optimism and caution. Despite macroeconomic and geopolitical headwinds, respondents point to attractive investment opportunities in certain asset classes.

    The survey analyzed industry views on economic outlook, asset class attractiveness, and market expectations over the next 12 months. Initial Wave 1 results showed a near equilibrium between bullish (52%) and bearish (48%) sentiment, but this optimism waned in Wave 2, with only 34% of respondents feeling bullish and 66% bearish.

    Resilient asset classes like multifamily, data centers, logistics/warehousing/cold storage, and Class A/Trophy office drove early 2025 bullishness. Affordable and senior housing were also seen as attractive options, with over 20% of respondents listing them in both surveys. Availability of equity capital increased from 5% to 15%, with 53% expecting more equity within the next 12 months.

    However, macroeconomic forces have impacted the CRE outlook. Tariffs are expected to have a negative impact, with 54% predicting a negative effect and just 5% anticipating a positive one. Interest rates remain a concern, with 60% in Wave 1 and 66% in Wave 2 identifying high interest rates as a top concern.

    Foreign investment is also seen as uncertain, with only 12% expecting it to be strong in Wave 2. Despite these headwinds, respondents believe the market's improving health provides a buffer against external challenges. A closer look at emerging trends and opportunities will be crucial for navigating the complex CRE landscape.