🔮 What to expect from CRE in 2025

👋 Hello, Best Ever readers!

In this week’s newsletter, the next CRE cycle begins, Greystar goes modular, mobile home parks keep crushing, and one market’s median rents hit $25,000 (not a typo).

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Let’s CRE!

🗞 NO-FLUFF NEWS: CRE HEADLINES

🏗️ Greystar Goes Modular: Greystar is launching its first U.S. modular housing development — a 312-unit complex near Pittsburgh — with six more projects planned nationwide as part of a strategic shift to avoid traditional building delays.

📈 Multifamily Surge: Apartment sales rose 18% YOY in October to $11 billion, fueled by growing investor confidence that multifamily is on the verge of recovery. Total volume, however, was still 35% below the five-year average for a prepandemic October.

🏠 House Hunters: A new Redfin survey of potential movers reveals safety/crime (17.5%) and climate risks (13.7%) are now major motivators for relocation, outranking traditional factors like property taxes, family changes, and school quality. 

📉 Manufacturing Slowdown: U.S. manufacturing activity contracted for the eighth consecutive month in November. However, it shows signs of stabilization, as it improved slightly from October and outpaced November projections while new orders rebounded after seven months of decline.

🎙️ Deep Dive: Best Ever host Amanda Cruise purchased a 42-pad mobile home park in North Carolina with a $1.3 million asking price, but she secured it for $650,000 after discovering discrepancies in reported occupancy and rents. She broke down the whole deal this week on The Best Ever CRE Show.

🏆 TOP STORY: HOW THE NEXT CRE CYCLE COULD CHANGE EVERYTHING

U.S. real estate is on the verge of a new cycle in 2025. But with interest rates down from their peaks and economic uncertainties easing, new risks on the horizon promise to make this new cycle drastically different from those past. 

Higher-for-longer rates will likely temper appreciation compared to previous cycles, and while capital flow into real estate is expected to increase in 2025, the rising tide may not lift all boats. According to LaSalle’s 2025 outlook, cycles will vary across sectors and markets. 

There are several themes that will influence investors’ decision-making in 2025. Despite recent rate cuts, uncertainty around long-term interest rates rose in Q4 2024 in the election’s wake, and persistent inflation fears will dominate 2025. LaSalle’s report cautions that this next cycle’s early gains likely won't match that of previous cycles, and transaction volume is expected to grow slowly as some sellers hold out for better values in 2026.

Here’s how this could impact key CRE sectors...