United States — After a period of uncertainty marked by higher interest rates and subdued investment flows, the U.S. commercial real estate (CRE) sector is beginning to show signs of renewed optimism as of September 2025. Recent reports from leading research firms and market analysts point to improving sentiment, with stronger capital deployment, rising valuations in select sectors, and cautious but growing confidence among investors.
According to CBRE’s mid-year 2025 U.S. Real Estate Market Outlook, investment volume in the CRE sector is expected to rise modestly in the second half of the year. Multifamily and industrial properties are poised to drive the majority of this growth, buoyed by strong demand fundamentals and investor confidence in their long-term performance. Office properties, by contrast, remain challenged by persistent vacancy rates and shifting workplace trends. Despite this unevenness, the overall trajectory is positive, suggesting the industry may be entering the early stages of a cyclical rebound.
Capital markets are also showing encouraging signs. CoStar has reported that dealmakers are increasingly deploying “dry powder”—large amounts of uninvested capital that had been sitting on the sidelines. Institutional investors and private equity funds are now directing significant sums toward high-quality assets in stable North American markets. This willingness to commit capital, particularly to multifamily and logistics properties, is seen as a major indicator that investor confidence is returning after several quarters of hesitation.
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Valuations in several property types have strengthened as well. Data from Altus Group indicates that the median price per square foot has risen year-over-year across many asset classes, even in areas where transaction volumes had previously slowed. Multifamily housing has been especially strong, with both sales volumes and pricing metrics showing notable gains. Industrial assets, supported by sustained demand for warehousing and distribution facilities, have also maintained upward momentum. These trends suggest that investors are willing to pay a premium for properties with clear growth potential, even if some parts of the market remain under pressure.
The macroeconomic backdrop has played an important role in boosting sentiment. Inflation has remained relatively stable in 2025 compared to the volatility of prior years, and consumer spending has held steady despite ongoing concerns about wages and household debt. Interest rates, while elevated compared to pre-pandemic levels, are expected to remain steady through the end of the year, with some forecasts suggesting possible easing in early 2026. This relative stability in borrowing costs provides real estate investors with a more predictable environment in which to deploy capital.
Nonetheless, challenges persist. The office sector continues to struggle, with many companies adopting hybrid or remote work models that have reduced long-term space requirements. Vacancy rates remain elevated in several major urban markets, and while some firms are experimenting with redesigned office spaces, the pace of recovery in this segment has been slow. Broader uncertainties around monetary policy and global economic conditions also pose risks to the industry. A sudden shift in interest rates or consumer demand could dampen the recent optimism.
Despite these headwinds, the outlook is more positive than it has been in several years. Industry watchers note that many of the fundamentals underpinning the CRE market remain strong, especially in residential and logistics sectors. Developers and investors are increasingly adopting a “cautiously bullish” stance, focusing on areas with reliable demand while keeping an eye on risks that could disrupt momentum.
The bottom line is that commercial real estate in the U.S. appears to be approaching a turning point. If current trends continue, the second half of 2025 could see a measurable increase in investment activity, particularly in multifamily housing, industrial, and logistics properties. While certain sectors such as office will continue to face challenges, the overall mood has shifted from cautious restraint to a more confident, forward-looking outlook.
