Commercial Real Estate Comeback:
Insights from Counsellors Title Agency
by: Anthony DiMaio
As we move deeper into 2025, the commercial real estate market is experiencing sustained momentum, primarily powered by the logistics and warehousing sector. This growth is largely attributed to the continued expansion of e-commerce, which shows no signs of slowing down. While leasing activities are gradually returning to pre-pandemic levels and vacancy rates are stabilizing, persistently high rental prices signal an ongoing supply constraint in the market.
Meanwhile, the office sector has reached a new equilibrium, with demand increasingly centered on premium, sustainable spaces designed to enhance collaboration and workplace efficiency. The hybrid work model, once considered temporary, has firmly established itself as a permanent feature of the corporate landscape, fundamentally reshaping requirements for Class A office environments. Though market performance varies significantly by region—with metropolitan centers like New York maintaining healthy occupancy rates — forward-thinking investors are finding opportunities to transform outdated properties through targeted renovations that meet evolving tenant expectations.
As we at Counsellors Title Agency observe the commercial real estate landscape, we’re pleased to report that the fourth quarter of 2024 marked a welcome return to positive and broad CRE deal growth after two challenging years. The Federal Reserve’s rate reductions coupled with the market confidence inspired by our “developer in chief” president-elect helped push December transactions to their highest level for that month in three years.
This renewed activity has energized price discovery and sector differentiation in the market. While December prices showed a slight downtick after four consecutive months of gains, we’re seeing interesting patterns emerge across sectors. According to CoStar data, cap rates for Office and Retail properties rose slightly since Q3, while high-quality Multifamily assets experienced compression. Importantly, distress deals remained insignificant, although we did note delinquencies creeping up for all sectors except Industrial in Q4.
The start of 2025 has brought some uncertainty to transaction activity, influenced by several factors: a jump in treasury yields, questions surrounding the legality and volume of executive orders from the White House, an unexpected increase in January inflation, changing tariff policies, and market disruptions following the Los Angeles fires. The Mortgage Bankers Association projects 2025 originations to expand by 16%, noting: “Given the strong pickup in origination activity at the end of 2024, it appears that at least some borrowers and lenders are ready to move.”
From our perspective at Counsellors Title Agency, the fundamentals across all major sectors are strengthening due to declining deliveries. In the Retail sector, 2024 net deliveries fell well below their 10-year average, maintaining vacancy at 4.1% in January. JLL reports that the Industrial sector is nearing the end of its vacancy and rent challenges that resulted from the surge in space. The Office sector showed promising signs in Q4, with vacancy stabilizing at 13.8%, a slowing pace of downsizing, and positive net absorption for the first time in three years. However, we recognize significant transition remains for the Office sector, particularly as the federal government’s aggressive return-to-work policy will lead to rightsizing in many markets.
For Multifamily properties, we anticipate the pace of deliveries to ease further in 2025. With current mortgage rates at their highest in over six months, the rent versus buy decision strongly favors renting, which should benefit property owners. Fannie Mae forecasts rental growth to double this year, presenting attractive opportunities for investors.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
Connect with Ralph on LinkedIn: https://www.linkedin.com/in/ralphaponte/