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The new administration has aggressively changed policy on trade, federal spending and foreign policy. These changes have put dealmakers on their heels and curtailed M&A in the process. However, we see emerging green shoots across commercial real estate, signaling a cautiously optimistic outlook for the sector.
Commercial real estate M&A activity is showing renewed momentum in 2025, despite lingering caution across the market. While some market participants may still feel the impulse to delay transactions, stepping back now could mean missing out on strategic opportunities.
Major transactions such as Blackstone’s $4 billion acquisition of Retail Opportunity Investments and Apollo’s $1.5 billion acquisition of Bridge Investment Group reflect unwavering sector confidence and the view that repriced assets offer long-term value. Private equity firms, sovereign wealth funds and insurance companies alike are ramping up their activity, particularly in sectors like hospitality and privately held office portfolios.
At the same time, increased consolidation presents an opportunity to create value through scale, portfolio diversification and operational efficiencies. Although deal volume has not fully rebounded, early indicators suggest we are entering a new phase of strategic consolidation, not just cyclical recovery. In a “higher-for-longer” rate environment, those who move decisively can capitalize on this inflection point and shape the next chapter of growth.
“The commercial real estate industry continues its transformation, with significant value-in-motion that will be the catalyst to drive deal activity higher in 2025 and beyond.”
Tim Bodner,US Real Estate LeaderWhile uncertainty is expected to persist in the short to medium term (driven by interest rate volatility, inflation, geopolitical instability and structural shifts in demand) there are opportunities for well-capitalized and strategically positioned investors.
We’re keeping an eye on sustained, technology-driven demand for data centers and power infrastructure, refinancing pressures tied to upcoming debt maturities potentially resulting in distressed sales and price discovery, and market repricing cycles triggered by shifts in monetary policy.