DLA Piper’s 2025 Real Estate State of the Market Survey

Commercial real estate leaders report there are reasons for market optimism despite macroeconomic and geopolitical headwinds, with a focus on fundamentals and emerging secular trends leading to attractive investment opportunities in a number of asset classes, according to DLA Piper’s annual Real Estate State of the Market Survey.

The survey analyzes the views of commercial real estate leaders on the sector’s economic outlook, the attractiveness of various asset classes and investment markets, and overall expectations for the next 12 months. The initial Wave 1 Survey was fielded between February and March, followed by a subsequent brief Wave 2 Survey conducted in May to explore the effects of US trade policy announcements.

Wave 1 showed a near equilibrium between bullish (52 percent) and bearish (48 percent) sentiment, a significant recovery from 2023 when 86 percent of respondents were bearish. However, that optimism has since been tempered: in Wave 2, the percentage of respondents who felt bullish about the market dropped to 34 percent from 52 percent, while those who felt bearish rose to 66 percent from 48 percent.

Confidence in resilient asset classes and improving capital conditions

• In Wave 1, 31 percent of respondents cited strong fundamentals in certain asset classes as a reason for optimism. Multifamily (51 percent), data centers (44 percent), logistics/warehousing/cold storage (38 percent), and Class A/Trophy office (27 percent) drove respondents’ early 2025 bullishness.
• More than 20 percent of respondents in both surveys listed affordable and senior housing as attractive, and 60 percent in Wave 1 expected return-to-office mandates to have a material positive impact on the office industry.
• Availability of equity capital as a reason for confidence jumped from 5 percent in Wave 1 to 15 percent in Wave 2, with 53 percent of respondents believing more equity will be available within the next 12 months.

Macroeconomic forces impact the CRE outlook

• In Wave 2, 54 percent of respondents predicted that current and proposed tariffs will have a negative impact – including 16 percent who anticipated a “very negative” impact – and just 5 percent expected them to have a positive impact. Forty-one percent of respondents expected no impact from the tariffs.
• Interest rates remained a concern in both waves, with 60 percent in Wave 1 identifying high interest rates as a top concern for the year ahead and 66 percent saying the same in Wave 2.
• In Wave 2, 41 percent reported they expect interest rates to increase in the next 12 months, a sharp increase from 17 percent in Wave 1 and from 6 percent in the 2024 DLA Piper Survey.
• In Wave 1, respondents were evenly split on the foreign investment outlook: 31 percent predicted it would be strong, 30 percent disagreed, and 39 percent were neutral. However, in Wave 2, just 12 percent indicated foreign investment would be strong.

The outlook for H2 2025: Cautious optimism amid external headwinds

DLA Piper’s 2025 State of the Market Survey indicates that CRE leaders entered 2025 with a sense of increasing optimism, but trade tensions, market volatility, and geopolitical issues have led to increased bearishness. Survey respondents overwhelmingly agreed that the market’s improving health – characterized by attractive opportunities in certain asset classes – provides a buffer against macroeconomic and geopolitical headwinds.