INSIGHT

RE Pulse survey: 2025 mid-year outlook and strategic opportunities 

Mark Leverette • August 18, 2025

Industries: Real Estate

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The real estate industry is no stranger to cycles of uncertainty, but 2025 presents a unique landscape of challenges and opportunities that demand strategic thinking and careful navigation. As economic headwinds persist and market dynamics shift, understanding where the industry is headed—and how to position your business accordingly—has never been more critical. 

Our recent Real Estate Pulse Survey, conducted in May and June with industry professionals, reveals telling insights about where real estate leaders see the market heading. Combined with broader industry data, these findings paint a picture of cautious optimism tempered by very real concerns about the road ahead.  

Note: Respondents were allowed to select up to three options per question in some cases. Percentages reflect the proportion of respondents who selected each option, not a sum total. 

Economic uncertainty tops industry concerns 

When we asked real estate professionals about their biggest worries for the remainder of 2025, the responses were clear and consistent. Economic uncertainty emerged as the overwhelming top concern, with nearly 70% of respondents identifying it as a major issue. This aligns closely with broader market sentiment, as trade policy changes and geopolitical tensions continue to create volatility. 

High interest rates remain the second-biggest concern, affecting approximately 60% of respondents. This finding reflects the ongoing challenge of elevated borrowing costs that have persisted throughout 2025, making financing more expensive and development projects more difficult to pencil out. 

Other significant concerns include: 

• Occupancy rates (around 40% of respondents) 
• Ability to secure debt (approximately 30%) 
• Labor constraints (roughly 15%) 
• Operational efficiency (about 15%) 

These concerns aren’t unfounded. According to CBRE’s recent mid-year market outlook, economic uncertainty and elevated long-term interest rates continue to create headwinds for investment activity, though fundamentals remain relatively stable across most commercial real estate sectors. 

A surprisingly optimistic long-term outlook 

Despite these near-term concerns, our survey revealed an interesting dichotomy in market sentiment. When asked about the commercial real estate market’s prospects a year from now, responses were almost evenly split between those expecting improvement and those anticipating stability. 

Nearly half (47.4%) of respondents expect the market to be stronger in a year, while 44.7% believe it will stay about the same. Only 7.9% anticipate weaker conditions—a remarkably small percentage given current economic uncertainties. 

This optimism suggests that while industry professionals acknowledge short-term headwinds, they maintain confidence in the fundamental strength of real estate as an asset class and the underlying drivers of demand. 

Multifamily and data centers lead investment opportunities 

Our survey participants see clear winners emerging in the current market environment. Multifamily housing dominated as the top investment opportunity, with over 60% of respondents identifying it as presenting the best prospects for the next 12 months. 

This confidence in multifamily aligns with CBRE’s findings that the sector began stabilizing in the first half of 2025, with the first appreciable year-over-year increase in national multifamily rent in over a year. While some high-supply markets face extended recovery timelines, the sector’s fundamentals remain solid. 

Data centers and warehouse/distribution facilities rounded out the top three asset types, both receiving double-digit support from survey respondents. The data center outlook is particularly compelling, with CBRE reporting record-low vacancy rates and preleasing of new construction consistently above 75% across primary markets. 

Secondary opportunities worth watching 

While the big three dominate attention, our survey revealed other sectors garnering interest: 

• Office properties (approximately 25% of respondents) 
• Warehousing and distribution (around 25%) 
• Retail properties (roughly 20%) 
• Senior housing (about 15%) 

Private equity emerges as the most active investor type 

One of the most significant findings from our survey relates to investor activity. Private equity topped the rankings as the investor type expected to be most active in the commercial real estate market over the next 12 months, with the type selected the most and highest. 

Family offices and REITs followed closely behind, suggesting that institutional capital remains committed to real estate despite current headwinds. This finding indicates that while public markets may show volatility, private capital sources continue to see compelling opportunities in commercial real estate. 

The dominance of private equity aligns with broader market trends showing that alternative investment strategies are gaining favor as traditional financing becomes more challenging to secure. 

Market fundamentals show signs of improvement 

Perhaps most encouraging for the industry, our survey respondents see positive momentum building in several key areas. Transaction activity topped the list of factors expected to improve, with over 55% of respondents expressing optimism about increased deal flow. 

Other areas where respondents expect improvement include: 

• Availability of capital (40% of respondents) 
• Cost of capital (approximately 32%) 
• Vacancy levels (around 37%) 
• Cap rate reduction (roughly 30%) 
• Rental rates (about 20%) 

These expectations suggest that while current conditions remain challenging, industry professionals anticipate a gradual normalization of market conditions as uncertainty diminishes and capital markets stabilize. 

CBRE’s research supports this optimism, noting that commercial real estate investment activity is expected to grow by 10% in 2025 to $437 billion, despite remaining below pre-pandemic averages. 

Technology integration accelerates across the sector 

Our survey also explored where artificial intelligence and technology adoption will have the most impact in real estate over the next year. The results show a clear focus on operational efficiency and risk management. 

Property management and operations emerged as the top area where AI will provide value, with over 50% of respondents identifying this application. Financial modeling followed closely behind at approximately 45%, with property valuation and underwriting/risk assessment tied for third place. 

This focus on technology adoption reflects the industry’s recognition that operational efficiency and data-driven decision-making will be crucial competitive advantages in the current environment. 

Strategic implications for real estate professionals 

The survey findings suggest several strategic considerations for real estate professionals navigating the current market: 

Focus on defensive strategies 

With economic uncertainty dominating concerns, prioritizing defensive investment strategies and maintaining strong balance sheets will be crucial. This might mean focusing on properties with stable, long-term lease structures or markets with strong demographic fundamentals. 

Embrace technology adoption 

The emphasis on AI applications in property management and financial modeling suggests that firms investing in technology capabilities will gain competitive advantages. Consider how automation and data analytics can improve operational efficiency and decision-making processes. 

Position for the recovery 

With nearly half of respondents expecting market improvement within a year, this may be an opportune time to position for the upturn. Whether that means securing attractive financing while others wait on the sidelines or identifying undervalued assets, preparation for improved conditions could pay dividends. 

Monitor capital sources carefully 

The dominance of private equity and family offices as active investor types suggests that building relationships with these capital sources will be crucial for deal flow and financing opportunities. 

Looking ahead: Preparation meets opportunity 

While uncertainty continues to characterize the real estate market, our survey results suggest that industry professionals maintain a fundamentally optimistic outlook. The key to navigating this environment successfully lies in balancing defensive strategies with opportunistic positioning. 

The convergence of economic pressures, technological advancement, and shifting investor preferences creates both challenges and opportunities. Real estate professionals who can adapt their strategies to align with these trends while maintaining operational excellence will be best positioned for success. 

As market conditions continue to evolve, staying informed about industry trends and maintaining flexibility in strategic planning will be essential. The current environment rewards those who can make data-driven decisions while managing risk appropriately. 

Ready to navigate the evolving real estate landscape? Our team at BPM understands the complexities facing real estate professionals today. From tax strategy and financial planning to operational optimization, we’re here to help you make informed decisions in any market environment. Contact us today to discuss how we can support your real estate business through these dynamic times.