What's Happening in Commercial Real Estate Right Now November 2025
Latest Updates Market Trends: Commercial Real Estate Prices Climbing Fastest rate in 3 years Prices up 4.2% compared to last year
If you own commercial property, invest in real estate, or are just curious about what's happening in the market, here's the latest news and what it means to the average commercial real estate owner/investor.
Featured Article Commercial Property Prices Are Rising Again Good news: Commercial real estate prices are climbing at their fastest pace in three years, up 4.2% compared to last year. After a rough few years, property owners are finally seeing values recover. Here's the interesting part—while prices went up in October, fewer people are actually buying and selling properties (sales dropped 22%). This suggests buyers and sellers are still figuring out what properties are really worth, which could create opportunities if you're looking to buy.
What's Happening With Different Property Types Warehouses and industrial buildings are still winners. Prices are up 4.9% from last year, and they've been rising every single month since May 2023. If you're looking for the safest bet in uncertain times, this is it. Office buildings are bouncing back. Despite all the talk about remote work killing offices, both downtown and suburban office prices are up about 4-5% from last year. Good office buildings in the right locations are proving they still have value. Shopping centers keep surprising people. Remember when everyone said retail was dead? Well, retail property prices have gone up for 17 months straight and are up 4.7% this year. Good retail locations are doing just fine.
Apartment buildings are stabilizing. After almost three years of prices going down, apartment values have now gone up three months in a row. If you've been waiting to invest in apartments, this might signal things are turning around.
Holiday Shopping Tells Us About Retail Properties People are planning to spend more money this holiday season—about 4.6% more than last year. But here's the catch: when you account for higher prices (inflation), they're not really buying much more stuff, just paying more for the same things. What this means if you own retail property: Your retail tenants might see higher sales numbers, but their actual profit margins could be squeezed. This is a good time to work with your tenants and make sure they're financially healthy. The good news? People say they'll spend an average of $736 on holiday gifts, which is 10% more than last year's actual spending. One interesting trend: Baby boomers are planning to spend 21% more this year, while younger generations are being more careful with their money (only planning 5-7% increases). If your retail tenants cater to older shoppers, they might do better than those targeting younger customers.
People Are Feeling Nervous About the Economy Consumer confidence—basically how optimistic people feel about the economy—dropped to its lowest point since April. People are worried about inflation, tariffs, and politics. The recent government shutdown didn't help either. Why this matters for commercial real estate: When people are nervous about the economy, they spend less money. This means: • Retail stores and restaurants might struggle more • It could take longer to find tenants for empty spaces • You'll want to be extra careful about whether your tenants can actually pay their rent • Some property owners who are in tough financial spots might need to sell, creating potential deals for buyers with cash Here's something interesting: Young people (under 35) are actually feeling more confident, while older people (especially 55 and up) are the most worried. This generational split might mean properties that appeal to younger people could do better than those targeting older demographics.
The Housing Market Is Still Struggling Home builders are not feeling great—their confidence is still pretty low. Even more telling: 41% of builders are now cutting prices to attract buyers (the most since COVID), with average discounts of 6%. What this means for commercial real estate:
Good news for apartment owners: If people can't afford to buy houses, they're going to keep renting. This means apartment buildings should continue to have steady demand. Warning for certain retail: When fewer people are buying homes, they're also not buying furniture, home improvement supplies, and decorating items. If you have tenants in these categories, keep an eye on their sales. Industrial buildings: Less home construction means less demand for warehouse space related to building materials, though this is usually a small part of the overall industrial market.
Interest Rates Might Drop Again in December The Federal Reserve (the people who control interest rates) will probably lower rates by a small amount in December. Inflation has been fairly stable, which gives them room to help the economy without worrying too much about prices rising too fast. What this means for property owners and buyers: • Borrowing money should get a little bit cheaper • However, nobody knows what will happen after December, so if you can get a good deal on a loan now, take it • If you have loans coming due soon, 2025 will be an important year to refinance The government shutdown made things complicated because the Fed didn't have all the usual data they rely on. This uncertainty might continue, which could make lending markets a bit unpredictable.
Building New Properties Is Getting More Expensive Construction spending barely went up (just 0.2%) in August, but the cost of materials and labor went up 2.2%. This squeeze means developers are having a tough time making money on new projects. If you're thinking about building something new: • Profit margins are tight right now • Building costs are high, but spending isn't increasing much • Only build if you're really confident about the project—maybe you already have tenants lined up or great financing • This probably isn't the time for risky, speculative projects
The Job Market Is Sending Mixed Signals The September jobs report showed employers added 119,000 jobs, which was better than expected. But unemployment went up to 4.4%—the highest since October 2021. Several big companies have announced layoffs, and some data shows private companies actually stopped creating jobs in late October.
What this means for different types of commercial real estate: Office buildings: More jobs is good for office demand, but layoffs and higher unemployment are bad. Companies are looking for nice, efficient spaces but might be taking less square footage overall. Warehouses: Jobs in e-commerce and supply chains have held up pretty well, which is good for industrial properties. But if the economy really slows down, this could change. Retail: People with jobs spend money at stores. When unemployment goes up, retail stores struggle, which eventually hurts property owners. Apartments: Job growth means people can afford rent. But if unemployment keeps rising, you might need to offer move-in specials and discounts to keep apartments filled, especially in cities where lots of new apartments are being built.
The Bottom Line: Good News Mixed With Uncertainty Right now, commercial real estate is showing some really positive signs, but there are also some warning flags. Here's the simple version: The Good News: • Property values are going up again across almost all types • There aren't as many people buying right now, so you might face less competition • Apartments are recovering after a rough few years • Interest rates might come down a bit more • Some property owners in financial trouble might need to sell, creating opportunities for buyers The Challenges: • The economy is uncertain—people are worried about their jobs, inflation, and politics • Building new properties is expensive • The job market is starting to show some weakness • Even though people say they'll spend more, they're really just paying higher prices for the same stuff What You Should Do: • Focus on safer bets like warehouses, essential retail (grocery stores, pharmacies), and apartments in good locations • Pick properties that are already making money rather than ones that need a lot of work • Keep some cash available since we don't know what will happen next
• Look at recovering property types like offices and apartments—they might be good deals before everyone else notices • Stay close to your tenants and make sure they're doing okay financially The commercial real estate market is changing. Success in 2025 will depend on being smart about what you buy, being careful with your money, and being ready to move quickly when good opportunities show up. While the economy is sending mixed messages, good properties in the right locations should continue to do well. --This blog post is based on data from industry sources and is for informational purposes only. Always do your own research and talk to professionals before making any investment decisions.