CPE Executive Council: The CRE Niches That Will Grow the Most in ’25
A look at data centers, multifamily and more.
As we get to the end of 2024, commercial real estate executives are making predictions for next year. This month the CPE Executive Council shares which areas they believe will experience the most growth in 2025.
A Comprehensive Look
E-commerce and Logistics: The ongoing rise of e-commerce will continue to drive demand for warehouse and logistics spaces, especially those supporting “last-mile” delivery near urban centers.
Technology and Data Centers: With the increasing reliance on cloud computing and data storage, the demand for data centers is expected to grow. Companies like Amazon, Google, and Microsoft are heavily investing in this sector.
Health-care Facilities: The aging population and advancements in medical technology will boost the need for health-care facilities, including hospitals, outpatient centers and specialized clinics.
Sustainable and Green Buildings: As environmental concerns become more prominent, there will be a growing demand for sustainable and energy-efficient buildings. This includes both new constructions and retrofitting existing structures.
Multifamily Housing: Urbanization and the need for affordable housing will drive growth in multifamily housing developments. This sector is also likely to benefit from any government initiatives aimed at increasing housing affordability.
Retail Spaces Adapted for Experience: While traditional retail may face challenges, spaces that offer unique experiences, such as entertainment complexes and mixed-use developments, are expected to thrive.
These trends highlight the dynamic nature of the commercial real estate market. —Doug Ressler, Manager, Business Intelligence, Yardi
Eying IOS
I think we will continue to see growth with the industrial outdoor storage (IOS) sector. Also, with power being a big issue, I expect that we will see increased development and redevelopment of data centers throughout the country. Finally, as the finance market continues to rebound, I think we will see increased investment in single-tenant net lease properties. —Dave Ebeling, Owner, Ebeling Communications
Data Base
While hiring is often a lagging indicator, at senior executive levels it often predicts strategic trends. Recently, it seems every investor with dry powder wants to talk about hiring to launch or expand data center platforms. Much as the sector’s growth is constrained by access to power, these companies will likely find their immediate plans stifled by a very shallow talent pool. —Michael Uzyak, senior managing director, Specialty Consultants
Interested in joining the CPE Executive Council and being featured in future articles? Email Jessica Fiur.
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