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What makes this moment significant is that it's happening in a non-recessionary environment; a scenario that’s historically rare. Following a substantial dip in values between 2022 and 2023, strong operating fundamentals have fueled CRE’s recovery. Net operating income rose by 5% in 2023 and 3.2% in 2024, both exceeding long-term averages. Projections now suggest CRE returns could reach +5% by year-end, with annualized returns climbing to 7% over the next five years and potentially 8–9% within a decade.
In tandem, the commercial real estate world is undergoing long-term structural changes. Average deal sizes are shrinking even as transaction volumes and price per square foot rise especially in the industrial and multifamily sectors, which have seen PSF increases exceeding 250%. The modern investor is targeting smaller, more efficient, and well-located assets, with precision and income performance taking priority over size and speculation.
In contrast, CRE is positioning itself as a stable, income-generating asset class with long-term upside.
The Bottom Line
Confirmed by Coldwell Banker Commercial Worldwide, as of mid-2025, commercial real estate isn’t just rebounding, it’s leading the real estate sector and rewriting the investor playbook. With resilient income, improving fundamentals, and projected return spreads of up to 300 basis points over housing, CRE offers both stability and opportunity.
At Coldwell Banker Commercial Arnold and Associates, we’re committed to helping our clients capitalize on this moment with expert guidance, proven strategies, and deep local knowledge of Southeast Texas and beyond.
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