After two years of caution and correction, 2025 is emerging as a potential turning point for global commercial real estate.

According to Deloitte’s recently published 2025 Commercial Real Estate Outlook, industry leaders are increasingly confident that the worst may be over – and that conditions are set to improve across most core real estate fundamentals.

The report, based on a global survey of hundreds of senior executives and institutional investors, reveals a striking rebound in expectations:

Where only 27% of respondents in 2024 expected market improvements, that number has surged to 68% this year. The share anticipating further deterioration has dropped from 44% to just 13%.

“We’re seeing a broad-based shift in sentiment,” the report states. “Executives are increasingly focused on repositioning and reentering the market, rather than simply preserving capital.”

Capital access and financing conditions improving

One of the most notable trends in the 2025 outlook is a growing belief that financing conditions are easing.

Nearly seven in ten respondents (68%) expect capital to become cheaper, while 69% believe it will become more accessible. That marks a significant turnaround after several years of aggressive monetary tightening, particularly in Europe and the United States.

For developers and real estate investors in core urban markets – including Germany – this shift in sentiment could unlock long-delayed projects and support a gradual rebound in transaction activity.

Different speeds across sectors

Although the overall picture is improving, not all segments of the commercial real estate market are recovering equally.

Sectors such as logistics, hospitality, and residential rental housing are leading the optimism. These asset classes are expected to benefit most from macro trends like urbanization, travel recovery, and digital infrastructure growth.

The office market, however, remains more uncertain. Hybrid work trends, elevated vacancy rates in certain metro areas, and a flight to quality continue to weigh on sentiment. That said, there are early signs that demand is stabilizing for well-located, ESG-compliant office assets.

A strategic window for reentry

As markets begin to stabilize, many investors now view 2025 as a strategic window for reentry.

Price adjustments over the past two years have created potential value opportunities, while capital that has been sitting on the sidelines may soon re-enter the market – particularly as interest rates begin to normalize and inflation shows signs of containment.

Deloitte’s report emphasizes that while the rebound may not be immediate or universal, the underlying fundamentals are finally moving in the right direction.

“We’re seeing a broad-based shift in sentiment,” the report states. “Executives are increasingly focused on repositioning and reentering the market, rather than simply preserving capital.”

Outlook

While risks remain – from geopolitical instability to economic slowdown in parts of Europe – the broad message from Deloitte’s research is clear:

The commercial real estate sector is entering 2025 with more clarity, better access to capital, and a renewed sense of forward momentum.

For investors with a long-term view, particularly those focused on core urban markets like Germany’s high streets, the mood is no longer defensive. It’s cautiously optimistic.