Intelligent Investment
2025 U.S. Investor Intentions Survey: Investment Activity Poised for Growth
January 23, 2025 3 Minute Read
Investor Insights: Positive Growth for 2025
Executive Summary
- Seventy percent of commercial real estate investors surveyed by CBRE plan to buy more assets in 2025 than they did last year.
- The biggest challenge for investors is elevated and volatile long-term interest rates.
- Dallas and Miami/South Florida remained investor favorites and several other gateway markets once again ranked in the top 10 most preferred.
- Multifamily and industrial remained the most preferred sectors, with retail gaining favor.
- Pricing expectations have stabilized across property types, with wider discounts for office assets expected.
Investor Sentiment
CBRE’s 2025 U.S. Investor Intentions Survey found that investor optimism this year is tempered by uncertainty and risks. Elevated and volatile long-term interest rates were the biggest challenge cited by investors. Nevertheless, 54% expect that overall investment activity will begin to recover by the first half of 2025.
CBRE expects that the 10-year Treasury yield will remain above 4% throughout 2025. Although this will weigh on investment activity, particularly in the first half of the year, CBRE still believes that the recovery will continue in 2025.
Investors appeared more optimistic about when their own investment activity would start to recover, with 75% expecting this to occur by H1 2025. This implies a first-mover advantage for many investors as the recovery gains traction.
Seventy percent of surveyed investors plan to buy more commercial real estate assets than they did last year, while just under 50% plan to sell more. This dynamic will likely create more competition for assets and allow pricing to firm even as rates remain somewhat elevated.
All of this will be supported by additional capital, with all investors either maintaining or increasing their allocations to real estate. A slight majority of investors cited favorable pricing as a reason to increase allocations. The Fed’s interest rate cuts and pro-growth policies proposed by the Trump administration have likely lessened concerns about the denominator effect.
Figure 1: Buying Intensions in 2025 vs. 2024 & 2023
Top Markets
Dallas was ranked the top-performing market for the third consecutive year. Investors remained confident in Miami/South Florida but Boston supplanted it as the second-best performing market this year. Investors also showed confidence in other gateway markets this year, with San Francisco and New York City also ranking in the top 10.
In terms of market attractiveness, Dallas and Miami ranked first and second, respectively. Dallas has maintained the top position for four years in a row. The gateway markets of Boston, Washington, D.C. and San Francisco reentered the top 10 list this year.
Among secondary markets, the Sun Belt continues to dominate. Overall, investors appear to be seeking opportunities in gateway markets at a discount, while maintaining a continuing belief in the Sun Belt’s growth prospects.
Figure 2: Top 10 most attractive markets for investment
Strategies & Property Types
Value-add and core-plus were the preferred strategies for just under two-thirds of investors. Meanwhile, opportunistic, core, distressed and debt strategies saw notable declines from the previous year. All of this indicates that investors are changing strategies as the cycle evolves.
Investors continue to prefer multifamily assets by a wide margin, with nearly three-quarters targeting them vs. just 37% targeting industrial & logistics assets. Retail is the third most favored property type, which unlike multifamily and industrial saw an increase from last year in the number of investors targeting it. Office assets also saw an increase in investor interest due to more certainty about office utilization rates.
Investors indicated a preference for high-quality assets across all property types. This underscores our belief that investors will be more discerning about market and asset selection.
Land, self-storage, industrial outdoor storage (e.g., shipping containers, motor vehicles, construction materials), healthcare and life sciences ranked most favorably among alternative assets. However, more than half of survey investors said they have no interest in pursuing alternative investments this year. We think this is because investors appear focused on repriced assets in the main property types.
Except for office assets, investors expect that property prices will stabilize this year.
Figure 3: Preferred sectors in 2025 vs. 2024 & 2023
Source: U.S. Investor Intentions Survey, CBRE Research, January 2025.
Debt
Nearly 70% of investors said that they will maintain the same debt-to-equity ratios as last year, with 56% indicating they will tolerate one year of negative leverage. Uncertainty around the direction of interest rates and higher interest expenses remain the top two challenges for investors sourcing debt.
Regarding debt investments, investors are most interested in mortgage financing, mezzanine financing and distressed debt, although to a lesser degree than last year. Investors are more interested in direct real estate equity investments this year to take advantage of favorable pricing.
The Bottom Line
Investors are ready to deploy more capital in 2025. This sentiment underpins CBRE’s expectation that despite elevated interest rates, the recovery in investment activity will continue. However, amid some interest rate volatility, market and asset selection will be more important than ever as a new real estate cycle begins.
Related Insight
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CBRE’s 2025 Asia Pacific Investor Intentions Survey uncovered an improvement in buying intentions across most markets in Asia Pacific this year, with over half of respondents indicating their preference to buy more real estate in 2025.
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Contacts
Darin Mellott
Vice President, Head of U.S. Capital Markets Research, CBRE
Kevin Aussef
Americas President of Investment Properties, CBRE
James Millon
President, US Debt & Structured Finance, Advisory Services
