Many in CRE have been predicting market recoveries are just around the corner since at least 2022. According to analysis out of CoStar Group, there are signs that things may be improving on a fundamental level. However, it will take time and there is the possibility the economic developments in 2025 could knock things awry.

“There’s something about rolling the calendar over that makes people feel optimistic and positive,” Chad Littell, CoStar national director of U.S. capital markets, tells GlobeSt.com. “I approach markets differently where I’m looking for a specific environment or constellation of signs to align and tell us the probability of things lining up on not.”

However, 2025 may be different because of certain patterns in transactions, cap rates, and vacancy rates. Typically, real estate cycles run six to eight years and data suggests that the market could be in the early stages of a new cycle.