D
espite rising energy costs, office vacancies, and economic uncertainties, commercial real estate leaders remain optimistic about the opportunities 2025 may bring. According to a survey conducted by TD Bank at the CRE Finance Council Miami, over 200 industry professionals shared their outlooks for the year ahead.

    A significant majority (76%) believe that declining commercial property values will drive increased investment in 2025. The survey also found that:

    * More than half of investors (52%) expect future interest rate movements to have the biggest impact on the sector, while only 14% anticipate changes in government policies and regulations.

    * A majority (70%) predict housing material prices will rise in 2025, but only 32% expect this to affect investment in new developments.

    Return-to-office requirements from companies across the US are expected to drive growth in commercial real estate. However, investors and property owners don't anticipate office work returning to pre-Covid levels; instead, mixed-use spaces are seen as the future. Over two-thirds (68%) of CRE professionals expect mixed-use properties to gain traction in 2025.

    "We're experiencing a modest recovery in parts of the office market, but that doesn't mean we should revert to old ways," said Hugh Allen, Head of U.S. Commercial Real Estate at TD Bank. "Investors and owners are taking changing expectations into account when investing in new projects, including amenities like gyms and extended break rooms."

    While 70% of professionals expect housing material prices to rise, they're divided on how this will impact the market. Many investors have come to accept the current interest rate environment as the "new normal." Allen notes that navigating uncertainties around inflation and interest rates will be key for investors to make informed decisions.

    The survey also highlighted tech investment as a top priority in 2025, with predictive analytics expected to have the biggest technological impact (60%). Smart buildings and efficiency/sustainability advancements are also seen as significant trends. As energy costs rise, over half of industry professionals believe smart buildings will be the sustainability trend that makes the largest splash.

    This study was conducted at the Commercial Real Estate Finance Council Miami 2025 from January 12-15, 2025, with a total of 211 commercial real estate professionals polled.