The past couple of years or so have been a challenging environment for many CRE players to operate in — with high interest rates and now tariffs causing volatility and uncertainty. However, some see favorable conditions in their footprint and opportunities to play offense.
This was a sentiment shared during a panel at CREtech New York 2025, moderated by Vaibhav Gujral, senior partner at McKinsey & Company, which focused on the state of CRE. Industry leaders with expertise involved in a variety of asset classes, including Stephen Yalof, president & CEO of Tanger, Toby Bozzuto, President & CEO of Bozzuto, Luke Petherbridge, CEO of Link Logistics, Andrew Holm, partner and head of U.S. diversified equity at Ares Management and Cathy Marcus, co-head & global chief operating officer of real estate at PGIM Real Estate, all weighed in with their perspective of 2025.
Robust Logistics and Developments Slowdown Provides Favorable Conditions
While Petherbridge did not downplay the economic uncertainty that exists, he sees robust activity within the logistics asset class.
“We’ve leased more space, year to date, than we did a year ago, he revealed.
“That’s with tariffs, an incredible amount of uncertainty at length; we own about half a billion feet. About 5% of the US economy flows through our 8,000 customers.”
Petherbridge attributes the strong demand to what he calls the “re-industrialization of America,” which includes new data center developments and e-commerce growth, supported by a resilient consumer despite the economic headwinds.
For multifamily, the conditions now are also pretty favorable for Bozzuto, which manages 130,000 apartments. Toby Bozzuto noted that the once-influx deliveries in the sector in many cities are now starting to taper — resulting in a “positive landlord market.”
“Depending on the city, it’s beginning to burn off,” he said of the supply dynamics. “There’s still some hangover in Miami, Atlanta and national places like that, where there had been a large amount of supply, but generally it’s getting absorbed.”
From the point of view of retail, Yalof said that new development has been scarce. What you’re seeing instead is closures, with the “department store business contracting,” in particular, according to Yalof.
Holm also points to a “dramatic decrease in new supply” across CRE, coupled with Ares’ “industrial leasing going up fairly materially this year over last year.” Plus, Holm noted retail activity has been better over the past year to 18 months versus the decade prior.
Ares, of course, invests in a range of asset classes from logistics, multifamily, to hospitality.
One Gloomy Perspective
Meanwhile, Marcus offers the most gloomy view on CRE currently. While she does note that transaction activity is rising now, it’s not nearly where she would have hoped it would be at this point in 2025.
“I would hardly say capital is flooded into the market,” Marcus admitted. And it’s not because of the available credit.
“So you have a liquid market, from a credit perspective, you have a complete repricing of the market pretty much across the globe and across sectors, and yet you still don’t have that investor behavior that every other cycle I would have seen would have told me was going to happen,” she added.
Challenges Come with Opportunity
In the current landscape, some are looking for ways to play offense.
For example, given the limited retail development — Tanger is shying away from starting new projects. Rather, the company is looking to acquire properties at a discount and leverage its analytical tools to do so.
“It’s an acquisitions business, and we acquired a shopping center in Kansas City two weeks ago for 40 cents on the replacement dollar, Yalof highlighted.
“It’s a pretty amazing market. If you’ve got access to capital, then you can take advantage of the opportunity to run and buy stuff.”
Bozzuto is following that same mindset — but for multifamily. The Greenbelt, Maryland-based company has launched a fund, focusing on high-quality buildings. “The thesis there [is] five full class A buildings at a 10 or 20% discount,” Toby Bozzuto said, while adding, “these down times are where you find immense opportunities.”
To sum the thought up — yes, it’s a challenging market filled with uncertainty — but opportunities might be there if you have the capital to deploy.
Going into 2026, the panel seemed to share bullish sentiment about CRE conditions improving next year. Marcus, in particular, noted she feels “very optimistic about 2026” despite the disappointing landscape to this point in 2025.
Source: “CRE Leaders Talk Low Supply and Robust Logistics Sector”
