Amid a steady flow of mixed economic data, real estate investors are working carefully to separate “signal from noise,” according to Colliers’ most recent Market Snapshot. Further, the reality of a “higher for longer” environment appears to be setting in with the Federal Reserve’s latest decision to hold rates steady, according to the investment management firm’s David Amsterdam, president, capital markets, and Aaron Jodka, director of national capital markets research.
“Broader policy and geopolitical uncertainty have led some investors to slow-play decision-making, but others are pouncing on emerging opportunities,” says Amsterdam. “Real estate is a long-term play, and while current headlines may give investors pause, risk is a constant in the global economic landscape.”
Capital Remains Sidelined, Shows Signs of Improvement
The report found that the majority of capital fundraising from 2022 to 2024 remains unspent, with 72% of assets under management yet to be invested. Amsterdam notes that since prices have adjusted and there are clear signs that a new value growth cycle has begun, investors should become more active in the quarters ahead.
“Fundraising is showing signs of improvement after a slow second half of 2024, which is another promising signal of market recovery,” says Amsterdam. “And pressure is building for investors to deploy capital.”
Colliers’ research found that large funds have been raised by some of the biggest real estate players and that early indications for third-quarter fundraising suggest it will exceed that of 2024, setting 2025 up to be a stronger year overall. Additionally, investment sales momentum is slowly building, albeit with choppiness along the way.
Multifamily Continues to Dominate, Other Sectors Show Promise
While the multifamily sector remains the perennial volume leader, investors are finding ways to play all real estate sectors, says Jodka. And he notes that there are signs of stabilization in office fundamentals, with high-quality product leading the way.
“Investors with longer horizons are finding appealing pricing, though often in assets that require a lease-up strategy, which presents a compelling but high-risk acquisition period,” notes Jodka. “Occupiers, particularly tech companies along the West Coast, are discovering value and moving to secure assets.” He adds that industrial investors with confidence in the market stand to take advantage of current market uncertainty.
Retail deal flow has been stunted due to a lack of available product, but several indicators suggest increasing activity. Jodka also notes several other sectors show opportunity.
“Hospitality investors still have multiple ways to play the market and luxury and resort properties are also highly sought after,” says Jodka.
Improved Outlook Expected Over the Next Six Months
Overall, Jodka says that signs are pointing to an increasingly positive outlook for the second half of 2025, thanks in part to an uptick in the stock market. And while trade deals are stabilizing, Jodka predicts that uninvested capital will come off the sidelines, testing investor appetite for larger deals. He says that assuming the United States has a healthy GDP growth, sales volume should remain on an upward trajectory.
"Those investors with conviction and capital stand to benefit the most in today’s market environment,” notes Jodka.
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