As 2025 wraps, the market looks materially different than it did entering the year. Confidence increased, capital returned, and performance stabilized across several major asset classes. Deloitte’s year-end sentiment report showed nearly 90% of CRE leaders reported revenue growth in 2025, with more than 60% of respondents seeing year-over-year gains above 5%. CBRE data reinforced that momentum, noting approximately a 10% rebound in U.S. commercial real estate investment activity compared to 2024, marking one of the strongest recovery points of the post-pandemic cycle.
While not every sector moved in the same direction, the strongest performers shared the same characteristics: durable demand drivers, tight supply conditions, and operational maturity.
Multifamily
Multifamily remained a leading investment category throughout 2025 as demand continued to outpace new deliverable supply in many metros. CBRE’s midyear review highlighted that national vacancy compressed to roughly 4%, supported by positive absorption, slowing construction, and persistent affordability gaps in the single-family market. Capital activity followed. Altus Group reported 39.5% year-over-year growth in Q2 multifamily transaction volume, totaling $34.1B, or nearly one-third of all U.S. CRE capital deployed that quarter. With supply pipelines moderating and replacement cost pressures persisting, core-plus and value-add multifamily in job-dense and transit-adjacent environments remained among the strongest risk-adjusted opportunities of 2025.
Industrial & Logistics
Industrial remained one of the most consistently strong performers of the year. Cushman & Wakefield’s Q3 MarketBeat documented 45.1 million square feet of net absorption — a 33% year-over-year increase and the second consecutive quarter of improving fundamentals. Logistics REITs and national operators continued reporting record quarterly leasing and raised end-of-year earnings guidance based on sustained tenant demand and limited availability of modern Class A space. Investment appetite concentrated around last-mile logistics, port-adjacent distribution hubs, and facilities in high-growth metros—particularly where zoning constraints and replacement costs created meaningful supply barriers.
Necessity Retail
Necessity-anchored retail continued to outperform broader retail sentiment and remained one of the most stable investment categories of 2025. According to the National Association of Realtors, retail availability remained below 5% nationwide, while new supply tracked approximately 40% under the 10-year average. CBRE reported retail entered 2025 with the lowest vacancy rate of any major CRE sector, reinforcing its durability. Institutional capital continued concentrating around grocery-anchored centers, medical-adjacent tenant mixes, and well-located open-air retail in Sun Belt and high-growth suburban markets.
Office & Specialized Assets
Office remained split, and performance varied meaningfully by quality and location. Commodity product continued to experience longer lease-up timelines, while Class A and trophy assets benefitted from clear flight-to-quality behavior. CBRE noted that shortages of prime office space began emerging in select markets toward the end of 2025, reflecting renewed tenant willingness to commit to modern, amenitized buildings. Beyond traditional office, capital remained active in specialized asset types as investors sought categories with long-term structural demand and operational resilience.
Conclusion
2025 made one trend clear: the strongest investment performance came from assets with both structural demand drivers and operational sophistication. Multifamily, industrial/logistics, and necessity retail led on fundamentals, while prime office and specialized sectors performed well where strategy, execution, and digital maturity aligned.
As capital continues to move back into the market, the edge will belong to investors and ownership groups who balance sector selection with measurable leasing efficiency, digital visibility, and data-driven execution—not just traditional positioning.
