CRE Exchange: Commercial Real Estate, Property Valuations, Real Estate Analytics and Property Tax · Altus Group

2024 shifts and 2025 expectations - Insights from our latest CRE industry survey

·20 min·1 clip

Data centers surged 32 points to become the most anticipated top-performing property type, overtaking multifamily.

Host Cole Perry and U.S. Director of Research Omar El-Tarai from Altus Group analyze findings from their Q4 2024 Commercial Real Estate Industry Conditions and Sentiments Survey. The quarterly survey gathered responses from approximately 400 seasoned professionals across more than 100 firms in the U.S. and Canada. This episode details significant shifts in pricing perceptions, sector performance expectations, and transaction intentions heading into 2025. A major shift shows respondents increasingly view current pricing for retail, hospitality, industrial, single-family rental, and multifamily as "fairly priced," moving away from prior "overpriced" characterizations. The property types still perceived as most overpriced are land and development alongside office. Sentiment for data centers surged, with 62% of respondents expecting them to be among the best-performing property types, a 32-percentage-point increase from Q3. Multifamily followed as a top performer at 60%, though industrial warehouse sentiment softened for the fourth consecutive quarter. Nearly a third of respondents now expect life science properties to be among the worst performers, a 19% quarterly increase, while the outlook for office remains bleak with 88% anticipating it among the worst. Ninety percent of all respondents signaled an intent to transact within the next six months, with the largest firms (over $5B in AUM) showing the highest intent at 95%. Survey participants expect improved capital availability, with nearly half anticipating equity from funds to be "very" or "extremely" available—a 22% increase year-over-year. Expectations for debt fund availability also rose, and the securitization market saw the most dramatic shift, with 87% believing it will be at least somewhat available. The hosts interpret these results as setting up 2025 for a potential market recovery, though not without specific risks. Concerns over the cost of capital, while still the top issue, declined significantly, while external risks like geopolitical events, natural disasters, and insurance costs gained prominence. A surprising finding was the clear variance in plans based on firm size, with nearly 40% of large firms planning to expand into new metros. The tone is analytical and educational, focused on interpreting survey data and trends for a professional audience. This episode is ideal for commercial real estate investors, analysts, and executives seeking data-driven insights into market sentiment and 2025 expectations. Listeners looking for narrative storytelling or opinions disconnected from survey data might find it less engaging.

As heard by us

A clear look at CRE sentiment as capital expectations improve for 2025.

This episode gives commercial real estate a steadier read than the usual market noise. It walks through the latest quarterly survey with a calm hand, covering capital availability, debt and equity expectations, and the sharp turn in securitization sentiment without losing the…

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You want the clearest signal on where CRE money is heading next.

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