CBRE Global chief economist and global head of research Richard Barkham shares insights on trends in the commercial real estate sector as companies increasingly push for employees to return to offices and reduce remote work arrangements.

Barkham emphasizes that commercial real estate encompasses much more than just office spaces, including industrial facilities, retail locations, and residential apartments.

"We've had a big value drop in commercial real estate and a rise in vacancies, particularly in the office sector, but I think as we move into 2025 with economic growth being fairly robust, I think we're at the start of a new real estate cycle," Barkham states.

Discussing the current environment, he highlights that the rise of artificial intelligence will benefit the sector in the coming year, particularly through increased demand for data center facilities, noting that this segment is "on fire at the moment."

Barkham also points to strong apartment rental demand despite the current market oversupply and mentions that retail is experiencing growth driven by "good consumer growth."

However, when addressing the office sector, he acknowledges that "that's where the big problems in real estate have been," as vacancy rates continue to climb. Nevertheless, Barkham maintains a bullish outlook on this segment, stating that "even then the emerging trend is good" regarding office leasing activity.

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This post was written by Angel Smith