Investors Poised to Deploy More Capital in 2025 as U.S. Commercial Real Estate Market Primed for Growth: CBRE Survey

Investors are gearing up to inject more capital into the U.S. commercial real estate market in 2025, driven by favorable pricing and despite the challenges posed by interest rate fluctuations, according to the findings of CBRE's 2025 U.S. Investor Intentions Survey.

The survey, which covers all asset types, underscores investors’ optimism about the continued recovery of real estate market fundamentals, with 70% planning to acquire more assets in 2025 than in the previous year. Investors are broadly positive about the overall market and even more so about their own plans, with 75% anticipating a rebound in their own investment activity by the first half of the year and over half already experiencing recovery.

“Investors are preparing to deploy more capital into the U.S. commercial real estate market this year, drawn by the attractive pricing environment and strong fundamentals,” said Kevin Aussef, Americas President of Investment Properties for CBRE. “Interestingly, investors are more optimistic about their own prospects compared with the broader market outlook, viewing the ongoing reset in pricing as a key opportunity to secure a first-mover advantage as the recovery gains momentum.”

Top Markets for Investment:

• Investors are strategically focusing on gateway markets and high-growth Sun Belt markets.
• Dallas maintains its position as the most preferred market for investment for the fourth consecutive year, with Miami ranking second.
• Boston emerges as an appealing market for investors, with Washington, D.C., and San Francisco also rejoining the top 10 most preferred ranking.
• Sun Belt markets continue to draw interest, with Atlanta, Raleigh-Durham, Austin, and Phoenix all ranking in the top 10 due to their growth potential.

• Multifamily remains the top target for investors by a wide margin, with 75% targeting this asset class, followed by industrial & logistics assets at 37%.
• Retail is the third most favored property type, with an increased number of investors targeting the asset class compared with last year.
• Office assets also gained investor interest due to more certainty about utilization rates and favorable pricing.
• Investor interest in alternatives has declined this year likely due to investors becoming more enthusiastic about traditional commercial real estate assets due to repricing.

Preferred Investment Strategies:

• Investors are adjusting their strategies to align with the evolving market cycle, with two-thirds favoring value-add and core-plus strategies. This indicates that investors are seeking opportunities that offer higher returns with lower risk amid a continued economic expansion.
• In line with this trend, opportunistic, core, distressed and debt strategies have seen declines compared to the previous year.
  
  

Investor Challenges

• The top three challenges for investors in 2025 are elevated and volatile long-term interest rates, higher operating costs and an uncertain path for interest rates.
• Investors are less worried about a recession and a wider gap in buyer and seller expectations this year, indicating improved sentiment about capitalization rate movements and economic fundamentals.

Debt and Financing Trends

• Debt strategies remain a significant consideration for investors, with 70% planning to maintain debt-to-equity ratios from the previous year.
• Most investors (56%) are willing to endure one year of negative leverage, indicating confidence in the market's recovery.
• Investor interest in mortgage (33%) and mezzanine financing (25%) remains healthy. Almost 70% of investors continue to favor direct real estate or wholly owned real assets as their primary equity opportunities in 2025
• Challenges related to interest rate uncertainty and higher borrowing costs are top concerns for investors seeking debt.