Commercial real estate expected to gain momentum in 2025

After experiencing a slow spell in the early 2020s, the commercial market has been gaining momentum in 2024 and is anticipated to see more listings in 2025

“Multi-family goes in the commercial realm,” said Michael Krieg, Broker Associate with United Country Real Estate. “It’s doing quite well in rented units, selling apartment complexes, mobile home parks and land for the development of those products.”

Cory Carlson, Commercial Broker with Bray Commercial Real Estate, added that the current market has been challenged by higher interest rates. New construction deliveries associated with higher building costs have decreased in recent times, as investors and users alike are focused on existing opportunities that have contributed to solid sale activity in 2024, with light industrial leading the charge on the commercial side.

“The commercial investment market is trading closer to seven to eight percent cap rates,” Carlson said. “The market could see some downward movement in rates in the first quarter of 2025. You’re going to see a bit of momentum coming out of the holidays. Election years in general slow the market as buyers and sellers alike sit on the sidelines, hoping for market clarity.”

Carlson said that the industry is currently seeing strong demand for smaller industrial warehouses with some office space.