- Private investors drove 59% of CRE deal activity in early 2025, outpacing institutions.
- Institutional capital raised $121B in 2025, signaling a possible market return.
- Transaction velocity for $2.5M-plus properties rose 17% year-over-year.
- Office, retail, industrial, and multifamily sectors show steady or improved demand.
Private Buyer Momentum
Globe St reports that private buyers continue to drive CRE investment, accounting for a record 59% of capital deployed in the first nine months of 2025. High-net-worth individuals and family offices are taking advantage of lower borrowing costs and improved yields. Their presence in the market is growing, even as some syndicators and equity funds struggle with fundraising headwinds.
Institutional Investors Poised to Return
Institutional capital, which slowed after 2022’s interest rate hikes, has started to rebound. In 2025, institutions raised $121B, a 33% increase from the prior year. This uptick, along with the NCREIF Total Returns Index turning positive, points to renewed institutional interest in CRE investment going forward.
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Transaction Activity Rising
The CRE market saw a 17% jump in transaction velocity for properties over $2.5M in the first three quarters of 2025, reflecting the broader recovery in equity capital availability. Both private and institutional investors are gradually increasing activity after a period of cautious deployment.
Sector Outlook Remains Strong
Office space net absorption reached 85M SF in 2025, with demand expected to moderate but remain healthy. Retail demand is expected to grow after a soft 2025, with developers focusing on single-tenant projects. This segment has attracted renewed interest from private capital, further reinforcing the trend of private buyers stepping in where institutions have pulled back. Analysts project that the industrial and multifamily sectors will maintain stable demand despite ongoing employment sluggishness.
