Commercial Real Estate in 2025: 3 Key Trends to Watch

Written by Christophe Robidas

Commercial Real Estate in 2025: 3 Key Trends to Watch
In a context of continuous transformation, the commercial real estate sector is set to experience significant changes in 2025. Our in-depth analysis highlights three major trends that should shape the market in the coming months.
1. Return to Office: A New Momentum for Office Real Estate
The first major trend of 2025 concerns the increase in office attendance days. This evolution is not coincidental: more and more companies are actively encouraging their teams to return to the workplace, motivated by several key factors:

• Strengthening corporate culture
• Building stronger social connections
• Stimulating in-person collaboration
• Optimizing collective performance

While remote work maintains its place in work organization, particularly for its appreciated flexibility by employees, we observe a growing trend among large companies to require more days of office presence.
Impact on the Real Estate Market
This evolution generates significant repercussions on the market. Property owners, who until now had to multiply incentives to attract tenants, are beginning to regain a more favorable position. Well-positioned office assets emerge as particular winners, especially those offering:

• Prime locations with transportation access
• Comprehensive services inspired by hotel standards
• Modern facilities and concierge services

However, office spaces located in less accessible areas or lacking proximity services are likely to continue facing significant challenges.
2. Declining Interest Rates: A Growth Catalyst
The second determining factor for 2025 lies in the downward trajectory of interest rates. This trend is part of a broader economic context characterized by economic stabilization and better-controlled inflation. The consequences of this evolution are multiple and promising for the sector.
Improving financing conditions should inject new dynamism into the market. Investors, who had adopted a wait-and-see position in recent years, might be encouraged to move forward with their projects. We particularly anticipate:

• A significant increase in transaction volume
• Renewed interest in sale-leaseback operations, allowing owners to mobilize their assets while remaining tenants
• The unlocking of previously suspended projects

3. Industrial Market in Rebalancing Phase
The third trend concerns the industrial sector, which could experience a moderation in demand. This evolution is primarily explained by two factors:
Firstly, the significant increase in supply following the construction of new facilities considerably broadens the options available to companies. Secondly, uncertainty surrounding U.S. customs and economic policies is pushing some companies to favor direct establishments in the United States, thus seeking to minimize risks related to potential additional costs.
This new dynamic could lead to:

• Stabilization of the Canadian industrial property market
• Rebalancing of power dynamics between landlords and tenants
• The emergence of more advantageous leasing conditions for occupants

Conclusion
The year 2025 is shaping up to be a period of important continuity for commercial real estate. While these trends present certain challenges, they also offer numerous opportunities for market players who can anticipate and adapt to them.
Our expertise at KW allows us to support our clients in identifying and seizing these opportunities while guiding them in their strategic decisions. In a constantly evolving market, our commitment remains to provide informed and personalized advice to optimize each real estate investment.