In 2025, the commercial real estate market in the United States is experiencing notable shifts in demand. While businesses continue to look for prime office spaces, there is a marked emphasis on flexibility, sustainability, and technological integration. These factors are influencing what businesses are looking for in commercial properties, from office buildings to retail spaces and warehouses.
Post-Pandemic Changes in Office Space Demand
Since the COVID-19 pandemic, businesses have re-evaluated their need for traditional office space. With remote work becoming the norm for many companies, especially in tech and creative industries, the demand for large, traditional office buildings has decreased. According to a 2025 report by CBRE, nearly 30% of businesses in major metropolitan areas have downsized their office space or opted for hybrid office models that allow employees to work both remotely and in person.
As a result, businesses are increasingly seeking flexible office spaces, co-working spaces, and properties that can adapt to shifting needs. Rather than long-term leases, companies are opting for shorter-term agreements that allow for more flexibility as they navigate a post-pandemic world.
Sustainability as a Priority in Commercial Real Estate
Sustainability has become a critical factor in the commercial real estate sector. In 2025, businesses are actively seeking eco-friendly properties that are energy-efficient and environmentally responsible. Many large corporations have made sustainability pledges, and this is reflected in their real estate choices. Green buildings with energy-efficient systems, solar panels, and sustainable materials are now seen as a necessity rather than a luxury.
The 2025 Green Building Adoption Index, produced by the Urban Land Institute (ULI), reveals that 57% of new commercial leases in the U.S. are now in buildings with green certifications, such as LEED (Leadership in Energy and Environmental Design). This trend is particularly strong in cities like San Francisco, New York, and Los Angeles, where companies are looking to align their operations with their environmental goals.
The Rise of Technology-Integrated Commercial Spaces
As technology becomes increasingly embedded in everyday life, businesses are seeking commercial properties that incorporate smart building systems. These systems, which integrate technology into heating, ventilation, air conditioning (HVAC), lighting, and security, are in high demand. According to a 2025 survey by JLL, 46% of companies cite smart building technology as one of the top factors in selecting a commercial property.
The rise of the Internet of Things (IoT) has led to increased adoption of smart office solutions. These systems allow businesses to monitor and control various building functions remotely, improving efficiency and comfort for employees while reducing operational costs. Smart buildings also provide real-time data on energy usage, helping businesses make informed decisions about their sustainability efforts.
The Demand for Warehouse and Industrial Spaces
While office spaces are evolving, the demand for warehouse and industrial spaces has skyrocketed. E-commerce, which grew exponentially during the pandemic, continues to drive demand for distribution centers and warehouses. In 2025, the demand for last-mile distribution centers is particularly strong, as companies seek to get products to customers faster.
According to a recent report by Cushman & Wakefield, warehouse vacancy rates in major cities are at historic lows, with some markets seeing vacancy rates as low as 3%. This shortage of available space is pushing companies to look for warehouses in less traditional locations, such as suburban and rural areas, to meet their logistical needs.
Retail Space and the Shift to Experiential Locations
The retail market is also undergoing a transformation in 2025. Traditional retail stores are being replaced by experiential spaces that provide customers with unique, immersive experiences. Businesses are focusing on creating environments that go beyond shopping, offering entertainment, dining, and interactive exhibits. This shift is largely driven by the changing preferences of consumers, particularly Gen Z and millennials, who are looking for more engaging and personalized retail experiences.
Retailers are increasingly moving toward smaller, more flexible spaces that allow them to adapt to changing consumer habits. Shopping centers and malls are being reimagined as community hubs, where consumers can not only shop but also engage in activities like fitness classes, live events, and social gatherings.
Looking Ahead: What Will the Commercial Property Market Look Like in 2026?
As we move into 2026, the commercial real estate market will likely continue evolving. Flexibility, sustainability, and technology integration will remain key drivers in the demand for commercial spaces. While the shift toward hybrid work models will continue to influence office demand, other sectors, such as e-commerce and experiential retail, will keep redefining the commercial real estate landscape.
In conclusion, businesses are increasingly seeking commercial properties that offer flexibility, efficiency, and sustainability. As the economy adapts to post-pandemic realities, commercial real estate will continue to shift to meet the changing needs of businesses and consumers alike.
