Commercial real estate investing has long been seen as a source of dependable returns and dividends, but legendary investor Charlie Munger issued a warning in 2023 that points to dramatic change.
“A lot of real estate isn’t so good any more,” Munger, investing guru Warren Buffett’s close friend, told the Financial Times. “We have a lot of troubled office buildings, a lot of troubled shopping centers, a lot of troubled other properties. There’s a lot of agony out there.”
Munger’s observations are backed by statistics that suggest softness in commercial real estate investing persists years later.
Keep reading for the commercial real estate statistics investors need to know in 2025.
Commercial real estate dollar volume
Total global commercial real estate dollar volume in 2024 stood at $757 billion, a 13% increase from 2023. Analysts attribute the increase to stubbornly strong economic growth and a relatively less restrictive monetary policy environment in 2024.
Investors pulled back from commercial real estate beginning in the third quarter of 2022. That was after roughly $600 billion poured into commercial real estate investing over the course of 2021, according to CBRE, a commercial real estate investing company.
The return to commercial real estate from 2021 to mid-2022 followed a similarly steep decline in 2020 amid the COVID-19 pandemic.
Commercial real estate investing: Volume by sector
Commercial real estate investing rose in every sector in 2024 compared to 2023.
The largest increases in investment took place in the multifamily sector, up $37 billion in 2024 compared to 2023, and the office sector, up $22 billion. Commercial real estate investment in retail properties and industrial properties respectively rose $7 billion. Investment in hotel properties rose $5 billion.
Easing monetary policy and positive global growth created momentum for commercial real estate across sectors. Multifamily properties remained as the top investment target even as supply outpaced demand in the U.S. Office real estate investment remains far under pre-Covid levels but continues to grow as businesses and workers navigate return-to-office mandates and remote arrangements.
Share of commercial real estate investment by sector
Significant shifts in commercial real estate investing have occurred since the pandemic.
- Multifamily properties overtook offices for the largest share of commercial real estate investment in the second quarter of 2021 as the impact of remote work became apparent.
- Industrial real estate drew a growing share of investment starting in 2020 amid the supply chain crisis and geopolitical developments that have encouraged nearshoring and reshoring.
- Retail bottomed out in 2021 but began to rebound in 2022 as shoppers started returning to stores.
Changes in commercial real estate pricing
Commercial real estate property values are up 4% in the 12 months prior to June 2024 but still down 18% from their peak in 2022, according to the Green Street Commercial Property Price Index. The index shows the price of commercial real estate transactions.
Commercial real estate property values peaked in March and April 2022 after a steep drop in 2020 and a rapid recovery through 2021.
Here’s how commercial property values have changed since 2007:
Commercial real estate values by sector
Commercial real estate investing prospects vary by sector.
Property values are up or flat across all sectors except for lodging, down 6%, and self-storage, down 3%.
Here’s how the prices of each sector have fared from June 2025 to the year prior, according to Green Street’s Commercial Property Price Index:
| Sector | Index Value | Past Month | Past 12 Months | 2022 Peak |
|---|---|---|---|---|
| All Property | 127.8 | 0.6% | 4% | -18% |
| Core Sector | 128.2 | 0.3% | 5% | -20% |
| Apartment | 153.8 | 0.0% | 9% | -19% |
| Industrial | 216.9 | 0.0% | 3% | -15% |
| Mall | 91.6 | 0.5% | 9% | -6% |
| Office | 71.3 | 0.5% | 0% | -37% |
| Strip Retail | 118.5 | 1.0% | 7% | -10% |
| Data Center | 113.3 | 2.6% | 6% | -12% |
| Health Care | 128.3 | 1.0% | 6% | -15% |
| Lodging | 100.4 | 1.0% | -6% | -12% |
| Manufactured Home Park | 283 | 0.9% | 5% | -13% |
| Net Lease | 94.3 | 0.0% | 0% | -19% |
| Self-Storage | 236.1 | 0.0% | -3% | -25% |
Multifamily commercial real estate investment trends
Multifamily commercial real estate has managed to come off record lows set in 2023 and is steadying. Vacancies are at 8% and rent growth in the 12 months prior to April 2025 was just 1% as new supply became available faster than demand grew, according to the National Association of Realtors.
Which areas in multifamily commercial real estate are seeing the fastest rent growth?
| Metro Area | 2025 Q2 | 2024 Q2 |
|---|---|---|
| South Bend, IN | 6.7% | 3.0% |
| Shreveport, LA | 4.8% | 2.8% |
| Springfield, MO | 4.7% | 2.7% |
| Rockford, IL | 4.6% | 5.9% |
| Harrisburg, PA | 4.3% | 2.7% |
| Rochester, NY | 4.3% | 4.1% |
| Augusta, GA | 4.2% | 0.4% |
| Gulfport-Biloxi-Pascagoula, MS | 4.1% | 3.8% |
| Montgomery, AL | 3.9% | 3.2% |
| Providence, RI | 3.9% | 4.2% |
Office commercial real estate investment trends
Commercial real estate investment interest in office space remains soft. The vacancy rate for office space is 14% and 20% for Class A office space - the highest-quality spaces on the market. Rent growth was just 1% for the 12 months prior to April 2025, according to the National Association of Realtors.
Other sources report even higher office vacancy rates. CBRE projects that office vacancy rates will peak in 2025 at 19%. Commercial Edge found the vacancy rate to be 19% in April 2025.
Gateway cities like New York, Dallas, and Miami saw strong office absorption gains in 2025 after a tough 2024, suggesting a combination of demand to live and work in those cities alongside corporate expansion.
Tech-heavy and high cost markets like Boston and San Francisco continue to struggle to fill office space, likely due to remote work and potentially AI reducing the number of desks that need to be filled.
Smaller metros, like Northwest Arkansas, Trenton, and New Haven showed rising absorption as offices migrate to cheaper secondary markets.
Which areas have the highest office absorption rates?
| Area | 2025 Q2 | 2024 Q2 |
|---|---|---|
| New York, NY | 5.91M | -5.17M |
| Dallas–Fort Worth, TX | 2.21M | 0.13M |
| Kansas City, MO | 1.80M | -1.00M |
| Northwest Arkansas, AR | 1.45M | 0.50M |
| Miami, FL | 1.19M | -0.02M |
| Saint Louis, MO | 1.16M | 0.88M |
| Trenton, NJ | 0.81M | -0.77M |
| Sacramento, CA | 0.79M | 1.02M |
| New Haven, CT | 0.78M | 0.06M |
| Houston, TX | 0.77M | 0.08M |
Which areas have the highest office absorption rates?
| Which areas have the lowest office absorption rates? | 2024 Q2 | 2023 Q2 |
|---|---|---|
| Hickory, NC | 1.08% | 2.30% |
| Savannah, GA | 1.42% | 1.80% |
| Wilmington, NC | 1.66% | 1.53% |
| Myrtle Beach, SC | 1.92% | 2.21% |
| Gulfport-Biloxi, MS | 2.05% | 3.20% |
| Huntington, WV | 2.15% | 1.94% |
| Davenport, IA | 2.17% | 2.39% |
| Olympia, WA | 2.39% | 2.16% |
| Pensacola, FL | 2.55% | 2.92% |
| Asheville, NC | 2.95% | 2.51% |
Industrial commercial real estate investment trends
Industrial commercial real estate saw a slight uptick in investment in 2024 compared to 2023 but fundamentals are softening Net absorption, a measure of demand, in the 12 months prior to April 2025 fell 22%, and the vacancy rate rose slightly to 7.2%, according to the National Association of Realtors.
Savannah, Dallas, Phoenix, Houston, and Kansas City are experiencing the most rapid occupancy growth rates.
Retail commercial real estate investment trends
Retail properties are dimming slightly for investors, as vacancies are back on the rise after two years and rent growth slows, per the National Association of Realtors.
General retail stores, which feature drugstores and supermarkets, were responsible for 98% of net absorption in the 12 months ending in April 2025.
Vacancy rates for malls remain elevated compared to the rest of the retail sector at 8.6%.
Hotel commercial real estate investment trends
Hotels continue to show some potential for investors. Occupancy rates remain just below pre-pandemic levels at 63%, but average daily rates and revenue per room exceeded pre-pandemic performance in the 12 months ending in April, according to the National Association of Realtors.
The 12-month occupancy rate for hotels in April 2025 stood at 63.1%, a few points below the 66% rate recorded in April 2019.
What is the 12-month occupancy rate for hotels?
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|
| 12-month occupancy rate ending in April | 66.0% | 60.2% | 45.0% | 60.5% | 63.3% | 62.8% | 63.1 |
At the same time, the average daily rate per room was $160, up from $131 in 2019. Still, sales volume did not exceed that of 2019 and was far below the peak recorded in 2022 as travel surged after the pandemic. 12-month sales volume for hotels
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|
| 12-month sales volume ending in April | $31.4 billion | $36 billion | $12.6 billion | $67.1 billion | $38.7 billion | $23.6 billion | $20.5 billion |
How to get into commercial real estate investing
Adding real estate to your portfolio is a great way to diversify your investments, and there are plenty of ways to start investing in real estate.
The easiest way to invest in commercial real estate is through a real estate investment trust (REIT). These companies manage and own commercial real estate and trade on stock exchanges just like stocks. Most pay high dividends. Investors can pick from broad REITs that have exposure to different commercial real estate sectors or more focused REITs that own specific types of real estate.
Real estate funds are an alternative to REITs. These mutual funds or exchange-traded funds (ETFs) invest in REITs but don’t have to pay dividends, so they tend to grow more quickly.
Investors looking for more hands-on ways to invest in real estate should consider purchasing residential real estate and turning it into a rental property or trying their hand at house flipping. Both come with risks and require significant up-front investment plus long-term management.
Whether you opt for a REIT, a real estate fund, or an investment property, here are some important facets of real estate investing to keep in mind:
- Commercial real estate has multiple sectors, each exposed differently to economic variables and other factors.
- Geography is key. Commercial real estate markets differ by location, and each has its own supply and demand and planned construction.
- Do your due diligence, especially if you’re purchasing real estate. Just like with any other investment, you will want to review financials and other documents. But with real estate, there are unique factors to consider, such as zoning, permitting, construction in the area, and how other similar projects have fared.
Sources
- CBRE (2025). "Global Capital Markets Conditions.”
- CBRE (2025). "H2 2024 Global Real Estate Capital Flows."
- Federal Reserve (2025). “Assets and Liabilities of Commercial Banks in the United States - H.8.”
- Green Street (2025). “Commercial Property Price Index.”
National Association of Realtors (2025). "Commercial Real Estate Market Insights Report."
