Growth predictions in industrial, multifamily & investment sales signal optimism for 2025
As the year draws to a close, commercial real estate brokers are feeling renewed optimism about where the market is heading. CORFAC International’s second-half 2024 survey of members from 75 independent commercial real estate firms shows that transaction activity remained stable across the global network in the latter part of this year. Members’ deal activity maintained an upward trajectory for 35% of respondents and held steady for 30% of respondents in the third and fourth quarters.
Members also believe better days are ahead for CRE. CORFAC members overwhelmingly agreed, at 61%, that stabilizing interest rates are having the most positive impact on their transaction activity. Respondents noted that they expect to see investment sales and multifamily activity increase over the next few months because of this.
“In variable market conditions, CORFAC members can offer experienced, market-savvy counsel and tap into our expanded network to get deals done,” said 2024 President David Boyd, CCIM, SIOR, managing principal of Boyd Commercial/CORFAC International in Houston. “We are pleased to note that 29% of our members received a referral from another CORFAC firm in the last six months.”
Positive Drivers of Activity
The survey of firms from 40 markets around the world also revealed that the warehouse/distribution and industrial/ manufacturing segments were the major drivers of business over the past six months. Looking ahead, 50% of respondents project that industrial will be their biggest driver of business in 2025.
Other positive influences on transaction activity include population migration to their markets (47%), employer return to office mandates (29%) and positive employment trends (24%).
Members also noted some microtrends for the region that are helping to boost activity.
Said one member, “As population grows in our market, growth in services follows the trend.” This supports observations of strengthening retail, including both mom-and-pop stores and regional grocers and convenience stores. Plus, medical office leasing continues to be a driver in the office subsector.
Continuing Worries Around Inflation
However, the headwinds haven’t entirely subsided, especially when it comes to construction. Increased prices for materials (73%) and inflation (82%) continue to have the most negative effects on CRE decision making and activity, according to respondents. With the election having been decided, some questions about future rates and tax policy have been answered. However, there is a question mark about the impact of potential tariffs on inflation and the cost of materials.
Be Ready for 2025
As companies begin to think about their 2025 moves, CORFAC member firms can offer clients trusted counsel and localized market intelligence along with the backing of an international network to navigate these dynamics.
The expectation is that deal activity will begin to pick up and investment capital will come off the sidelines as rates stabilize. Some owners will need to make a decision about whether it’s the right time to sell, and buyers and sellers will need to draw closer on pricing than they were in 2024. Similarly, some businesses will need to take stock of their office space needs and whether they’ll continue to offer hybrid options or require more days in the office.
In all cases, it’s necessary to understand how macro trends are affecting local markets and the importance of seeking guidance from qualified, experienced CRE brokerage experts.
About CORFAC International
CORFAC International is a global network comprised of privately held entrepreneurial commercial real estate firms with expertise in office, industrial and retail brokerage, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services.
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