While we are not expecting a sharp rebound in 2025, the market is ripe with opportunities for strategic investors. As we wait for valuations to bottom out, investors should not rely solely on lower interest rates
or declining cap rates. People should focus on pockets of growth where rent and net operating income will increase. Look for markets that are growing from big business expansions, new healthcare services, new entertainment projects and new school construction. Alternatively, focus on refurbishing well-located, older buildings because they are less expensive and often easier to finance. Lastly, with many CRE loans coming due this year, well-capitalized investors will likely find plenty of discounted assets. Expect recovery to vary by geography and asset class, with cap rates compressing in high-demand markets and sectors.

Source: Jane Thorn Leeson is Director of Research at Coldwell Banker Commercial Worldwide