Real Estate CEOs Emphasize Positivity, Discipline as 2025 Unfolds

Commercial real estate industry leaders appeared to anticipate the course of 2025, and to come into the new year, with a crystal ball in good working order. Experience in previous cycles equipped them to forecast the general course of a year that hasn’t unfolded in quite the way many expected, and to make adjustments in the guidance they provide to clients. In the latest installment of our 2025 Leadership Series, you’ll glean insights from Bob Hart, Founder and CEO of TruAmerica Multifamily; Annemarie DiCola, CEO of Trepp; Keith Lampi, CEO and President, Inland Real Estate Investment Corporation; and Alison Beddard, CEO of CREW Network.

Reflecting on developments since the beginning of 2025, has your overall outlook for the CRE market this year undergone significant changes? Have you observed shifts in your clients’ perspectives, and if so, what adjustments in the guidance are you and your team implementing to address these evolving viewpoints?

Bob Hart: We entered 2025 cautiously optimistic, and while macro volatility has persisted, we continue to see durable performance in workforce housing. TruAmerica’s portfolio occupancy of 94% is consistent with the national average, and we continue to see markets like Boston, San Diego, and Tampa (to name a few) perform extremely well. Our investment approach continues to emphasize discipline, capital structure flexibility, and targeting assets in submarkets with visible demand drivers and muted new supply. TruAmerica is focused on long-term value, not short-term timing.

Annemarie DiCola: Since the start of 2025, our overall outlook for the CRE market has evolved, not in a wholesale reversal, but in a shift toward greater caution in certain segments and more optimism in others. The data continues to show pressure points, particularly in office, where valuations remain challenged and refinancing risk is elevated. However, we have also seen resilience in sectors like industrial and select multifamily markets, which creates pockets of opportunity.

On the client side, sentiment has become more polarized. Some investors are leaning in, viewing distress as an entry point, while others are tightening underwriting standards and waiting for greater clarity on pricing. In response, our training has focused on helping clients get more granular, moving away from broad national assumptions and drilling down to property-type and market-specific trends.

We are encouraging scenario analysis around interest rate paths, expense growth, and asset-level performance, so clients can adjust strategies quickly as conditions shift. Ultimately, the key workflow we are suggesting now is about staying nimble: use data to identify where risk is concentrated, act decisively when opportunities emerge, and keep capital flexible for what will likely be an uneven recovery.

Keith Lampi: Our outlook at the beginning of the year was for slowing economic growth and moderating inflation, with interest rates drifting lower in fits and starts as a corollary. We envisioned this dynamic would create more transaction volume and a slow stabilization and recovery of real estate values. With the 10-year treasury down approximately 40 basis points from its January high and the NCREIF NPI Index notching a few quarters of moderate gains, this outlook has been correct so far.

The major change both in our business and in the industry at large has been developments surrounding tariffs and global trade policy. A focus on demographic-driven sectors rather than economically sensitive ones is a strategy that has held up well historically, and one that we believe should continue to perform well as the global economy adjusts to the new regime.

Alison Beddard: My overall outlook for the CRE market this year has trended more positive, specifically in the office sector. Despite the uncertainties of the global economy, U.S. tariffs, environmental hazards, there has been a slow and steady trend towards U.S. office vacancy reduction and a steady increase of absorption of office space, especially in Class A space.  We’ve moved through the era of “Covid leasing decisions” back to longer lease terms, premium rents for premium spaces, highest quality form and function, with a heavy focus on cost, smaller footprints and a re-purposing of 2nd generation space. Employee engagement is a necessary component to occupiers’ overall recruitment and retention strategies, of which office plays a role. 

While the office footprints are trending slightly smaller, they are more intentionally focused on employee experience.  Landlords who have adjusted their strategies to incorporate the building as part of the overall tenant experience will thrive and enjoy steady occupancy. The lack of new office construction in the U.S. over the past five years has helped reduce that vacancy rate, bridging the absorption and vacancy gap further to more equilibrium. Multifamily and office investors engaging with local jurisdictions to evaluate, modernize and implement applicable zoning and planning modifications to spur better utilization of downtown real estate is an excellent opportunity to look at the evolving role of downtowns play in the overall ecosystem of cities.  Incorporating more play and livable areas within downtowns can ultimately re-balance and ensure economic prosperity. 

Industrial real estate slowdown over the past 12 months continues to be challenged with decision-making due to uncertainty surrounding tariffs, labor and manufacturing costs. The possibility of new surge of industrial manufacturing could lead to a boost in construction demand, but still uncertain at this time.

Our CREW members are well-equipped to offer a steady hand. CREW Network provide the wraparound resources for our clients, with all 36 disciplines of CRE represented, providing our clients with the best possible resources for advice and decision-making.