After years of uncertainty clouding the commercial real estate market, a shift may finally be underway. For some time, a persistent lack of price discovery has left buyers and sellers struggling to align on transaction values—each side holding out for its ideal price amid turbulent economic conditions. But now, that stalemate may be breaking.
According to Coldwell Banker Commercial’s 2025 Midyear Outlook Report, the industry is inching toward renewed momentum, with buyers and sellers moving significantly closer on pricing over the past 18 months. It’s a cautious but hopeful sign that the long-frozen CRE market could be warming.
Despite obstacles like high interest rates, volatile construction costs, and tariff uncertainties, many sellers have made pragmatic choices. Rather than waiting indefinitely for the market to swing back in their favor, they’ve begun adjusting their expectations. At the same time, buyers have become more inventive in closing deals, leveraging alternative financing options and showing a greater willingness to meet sellers halfway.
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“People are tired of waiting it out, especially at a time when market volatility is high due to economic and political uncertainty,” Coldwell Banker Commercial noted in the report, suggesting stronger transaction volumes could follow in the latter half of 2025.
Data from MSCI Real Assets underscores this shift. In the first quarter of 2025, U.S. commercial real estate volume reached $100.6 billion—still shy of pre-pandemic norms, but marking a 14% increase year-over-year. Individual asset sales surged 24% over the same period. Retail properties led the way, followed by industrial, multifamily and suburban office assets. Central business district office spaces, however, continued to lag.
Much of this activity stems from flexibility on both sides of the table. In what the Coldwell Banker Commercial 2025 Broker Sentiment Survey describes as a reversal of trends seen over the past two years, sales activity has "greatly surpassed leasing in many markets.” And behind much of this movement is the growing use of seller financing.
Traditionally more common in transactions under $10 million, seller financing is now playing a central role across property types. For sellers, it offers a path to generate income; for buyers, it’s a way to sidestep steep interest rates from traditional bank loans. Buyers have increasingly turned to alternatives like cash transactions, 1031 exchanges and financing from local banks, credit unions and private lenders—steering away from large financial institutions.
As long as interest rates remain elevated, these creative deal structures are likely to stay in demand, especially in secondary and tertiary markets where many CRE buyers are owner-users or 1031 investors.
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