After several years of uncertainty, the commercial real estate industry appears to be gaining renewed momentum. The five largest real estate services firms — CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark — have all upgraded their financial outlooks for 2025 following a strong second quarter performance.
This marks the first time since the pandemic began in 2020 that all five have raised expectations in the same quarter, signaling a broad-based recovery, according to CoStar.
Driving the optimism were increased commissions from property sales and leasing, alongside gains in financing and property management fees. The upswing has extended beyond the major firms, with smaller brokerages also reporting rising deal volumes.
Executives in the industry remain cautious, noting that risks such as high tariffs and slowing job growth could weigh on momentum. However, recent disruptions tied to trade policies have so far had only a limited impact on overall deal activity.
Signs of Stabilization Across Major Firms
CBRE, the world’s largest real estate services firm, reported record second-quarter global leasing revenue, pointing to robust demand for office space. The company expects to reach a new earnings high in 2025, just two years after the market hit its lowest point in 2023. Cushman & Wakefield also highlighted strong transaction pipelines, offering confidence heading into the remainder of the year.
Much of the industry’s renewed confidence follows a turbulent period shaped by the pandemic and interest rate hikes aimed at containing inflation. Initial signs of a rebound at the end of 2024 were tempered by early-year policy shifts, but deal activity has since bounced back. Real estate owners and tenants are increasingly returning to the market, from tech companies signing leases in San Francisco to industrial developers restarting warehouse and factory projects across the U.S.
Buyers and sellers are reportedly more willing to compromise, which has helped push more deals through. Office market analysts suggest the sector is in the early stages of a larger capital markets recovery, with leasing and investment activity showing resilience.
Some business leaders are tuning out ongoing economic and political noise to focus on real estate decisions. There is a growing acknowledgment that uncertainty may persist, and companies are adjusting strategies accordingly.
Multifamily and Industrial Sectors See Renewed Activity
Across property types, demand is rising. Multifamily assets, particularly in the Mid-Atlantic region, are seeing heightened interest after a two-year lull. Bidding activity on well-maintained apartment buildings is up notably compared to last year. In Chicago, the Telos Group is experiencing an uptick in leasing activity across major office buildings, with more properties reentering the competitive market as owners recapitalize.
Return-to-Office Push Drives Leasing Momentum
Return-to-office mandates from major employers and government institutions are also playing a role in reviving long-term leasing decisions. With high-profile companies leading the charge, others appear more comfortable requiring workers to return, further stimulating demand for office space.
Still, challenges remain. While leasing shows signs of a steady rebound, the office sales market continues to lag, hampered by elevated interest rates and cautious buyers. The national office vacancy rate has hovered above 14% for two years, and investment sales remain sluggish.
Even so, bright spots are emerging. Real estate investment trusts such as Piedmont Realty Trust and Hudson Pacific Properties have recorded their strongest leasing performance in years, driven by tenants committing to larger and higher-value leases. Other firms, including Douglas Emmett, are also seeing signs of growth in occupancy and deal volume.
Although the road to full office market recovery may still be long, the recent surge in dealmaking suggests the commercial real estate market is on a firmer footing than it has been in years.
