The commercial real estate (CRE) landscape in the United States is experiencing a marked shift as the market bifurcates between high-performing, tech-forward assets and underperforming traditional properties. Research and data released in the second half of 2025 indicate that while total investment volume remains below pre-pandemic levels, capital is increasingly flowing toward select asset classes that align with emerging economic and technological trends. Properties such as data centers, logistics hubs, and medical outpatient facilities are seeing heightened investor interest, while older office buildings and secondary-market assets are facing increased vacancy, sluggish rent growth, and financing challenges.
According to analysts, investment activity in the U.S. commercial real estate market is projected to increase by roughly 10% in 2025. However, despite this growth, deal volume still lags behind the levels seen before the COVID-19 pandemic, remaining nearly 18% lower than historical averages. The modest rebound is being driven by several structural forces, including the sustained expansion of the digital economy, growing demand for AI and cloud computing infrastructure, and tax policies that continue to incentivize real estate investment. These factors are reshaping investor priorities and highlighting the growing divide between prime assets and those that no longer meet the evolving requirements of tenants and technology.
The demand for properties that can accommodate modern technology needs is a defining feature of today’s market. Data centers, in particular, are experiencing explosive growth. With near-zero vacancy rates in key markets, these facilities are becoming some of the most sought-after real estate assets. Their ability to support power-intensive, secure, and scalable operations makes them crucial infrastructure for the AI revolution and the broader digitization of business. Similarly, logistics hubs located near major transportation corridors are drawing significant capital due to their role in supporting e-commerce, supply chain efficiency, and last-mile delivery networks. These properties are most attractive when equipped with modern features such as EV charging stations, automated loading systems, and connectivity-ready infrastructure that can support emerging tech solutions.
Medical real estate is also gaining prominence, particularly outpatient facilities that align with shifting healthcare delivery models. As the U.S. population continues to age and demand for decentralized healthcare rises, these specialized properties are being recognized as stable, long-term investments. Unlike more cyclical asset classes, medical facilities often provide predictable income streams backed by long-term leases with creditworthy tenants, making them especially appealing in a higher interest rate environment.
In stark contrast, much of the traditional office sector is under pressure. National vacancy rates in office space remain high, with some urban markets seeing vacancies surpass 20%. However, not all office assets are performing equally. Properties that are located in amenity-rich environments, integrated into mixed-use developments, and adapted for hybrid work models are showing signs of resilience. These buildings, often referred to as Class A or trophy assets, tend to offer features such as flexible layouts, touchless entry systems, high-speed internet, wellness amenities, and sustainable design elements that align with both employer and employee preferences in the post-pandemic workplace.
On the other hand, aging office stock that lacks modern infrastructure or sits in less desirable locations is struggling. Many such properties face significant hurdles in attracting tenants or achieving competitive lease rates, and they are increasingly viewed as distressed assets. Financing challenges are compounding the problem. With interest rates remaining elevated and lenders exercising greater caution, property owners with underperforming or outdated assets are finding it difficult to refinance, reposition, or sell without accepting substantial discounts.
The emphasis on quality, connectivity, and future-proofing is extending beyond tenant preferences to influence investor behavior as well. Increasingly, investors are focusing on properties with strong digital infrastructure, energy-efficient systems, and adaptability for future technological needs. This includes smart building controls, fiber-ready connectivity, and power configurations capable of supporting high-density computing. Assets that can meet these criteria are commanding premiums in both lease rates and sales prices.
Furthermore, tenant quality is emerging as a major differentiator in asset performance. Properties anchored by tenants with strong financial profiles, long-term leases, and stable business models are more attractive to institutional investors seeking predictable returns. These types of investments are often found in core-plus strategies, where investors target slightly higher yields without taking on the volatility associated with value-add or opportunistic plays.
From a broader strategic perspective, many real estate firms and institutional buyers are shifting their focus away from generalized office portfolios and instead concentrating capital on niche sectors that benefit from long-term secular growth trends. This means a recalibration of traditional investment models to favor sectors that support the data economy, health infrastructure, and global logistics. Properties that can deliver resilience through cycles, offer operational efficiency, and maintain relevance in a rapidly evolving market are the ones gaining traction.
While macroeconomic uncertainties remain—including the potential for prolonged high interest rates, inflation volatility, and shifting labor market dynamics—the commercial real estate market is clearly entering a new phase. Success in this environment requires a more selective and analytical approach, prioritizing asset-level fundamentals, location quality, and technological readiness over speculative upside. The emphasis is shifting from quantity of holdings to quality of execution.
In the coming year, this divide between performing and underperforming assets is expected to widen. Investors who can identify and act on these patterns—favoring properties that are aligned with structural demand and technological trends—will be best positioned to navigate the evolving landscape of commercial real estate in the United States.
