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Sally Ann Flood, vice chair and U.S. real estate sector leader at Deloitte, was a guest on the latest episode of Nareit’s REIT Report podcast. She reviewed highlights of the firm’s 2025 commercial real estate outlook, which indicates that next year could be a potential turning point for the sector.
“After two consecutive years where most survey respondents expected revenue declines, this year 88% of global respondents now report they expect revenues to increase going forward,” Flood said.
In conjunction with its 2025 outlook, Deloitte surveyed more than 880 C-suite executives and their direct reports at major commercial real estate owners and investment companies.
Flood noted that 68% of respondents expect conditions for CRE fundamentals to improve in 2025, including cost of capital, capital availability, property prices, transaction activity, leasing, rental growth, and vacancies. “This is a major boost in optimistic sentiment,” she said.
Challenges remain though, and encompass elevated interest rates, changes in tax policy, global elections that could have long-ranging impacts on social and fiscal policy, and geopolitical instability.
Other topics that Flood discussed include which asset classes are seen as presenting the strongest opportunities today, capital deployment trends for 2025, the evolving role of AI in CRE, talent retention, and more.