Hello, Commercial Real Estate Pros! 🏢

Commercial real estate is undergoing a massive transformation. Some markets are collapsing—like Chicago’s office sector—while others, like industrial and data centers, are seeing explosive growth.

This week, we’re breaking down how to ask the right questions to land more deals, why some properties are plummeting in value, and what sectors are set to dominate in 2025.

If you want to stay ahead of the curve in CRE, this is your playbook. Let’s dive in.

📰 Upcoming in this issue

• The Right Questions to Ask as a Commercial Real Estate Agent 🏢

• Chicago’s Commercial Real Estate Crisis Deepens 🏢

• Why Commercial Property is at a Turning Point 🏢

📈 Trending news

• How AI Is Transforming Commercial Real Estate Decision-Making

• Commercial Real Estate 2025: Trends, Challenges, and What’s Next

• How Commercial Real Estate Shapes Cities, Economies, and Investment Strategies

The Right Questions to Ask as a Commercial Real Estate Agent 🏢 watch the full 10-min video here

Video published: March 4, 2025

When talking to property owners, the real estate game is all about positioning yourself correctly. In The Right Questions to Ask as a Commercial Real Estate Agent, Henry Eisenstein breaks down the art of pivoting conversations—shifting from an investor mindset to securing listings as a broker.

The key? Identifying seller motivations and adjusting your approach based on their experience level. A seasoned investor with a $300M portfolio won’t list with just anyone, but an 80-year-old owner looking to cash out? That’s an opportunity. Henry shares a simple yet powerful script to make the transition seamless, giving agents an edge in high-stakes conversations.

If you’re a commercial real estate agent, knowing when to pivot can mean the difference between losing a deal and landing a high-value listing.

Key Takeaways:

• 🎭 Master the pivot: Transition from investor to broker by offering a strategic listing option when price expectations don’t align.

• 🏗 Know your audience: Seasoned investors rarely list with newcomers, but smaller property owners may be open to working with you.

• 📉 Avoid wasting time: If a seller insists on an unrealistic price, gauge their willingness to explore a listing before walking away.

• 📝 Structure your pitch: A simple, confidence-driven script can turn hesitant sellers into full-fledged brokerage clients.

Chicago’s Commercial Real Estate Crisis Deepens 🏢 read the full 672-word article here

Article published: February 27, 2025

Chicago’s commercial real estate market is facing a reckoning. Office vacancies are at record highs, property values are plummeting, and landlords are scrambling to retain tenants. The city’s premier tech incubator, 1871, is leaving the Merchandise Mart, a move that underscores a growing shift away from large office footprints.

Adding to the turmoil, the federal government is selling key downtown properties, including the Kluczynski and Metcalfe buildings, while private companies like Citadel are downsizing to cut costs. The Montgomery Ward building—once a prime tech hub—was just sold for $421 million less than its 2018 purchase price, reflecting the steep decline in commercial property valuations.

Meanwhile, the shift to hybrid work continues to impact demand. Office visits were down 47% in January 2025 compared to pre-pandemic levels, leaving many buildings underutilized. The one bright spot? Google’s Thompson Center headquarters, which promises to bring over 1,000 employees downtown. But the question remains: Will it be enough to turn the market around?

Key Takeaways:

• 📉 Office vacancies are skyrocketing: Downtown Chicago ended 2024 with record-high office vacancies, putting pressure on landlords and investors.

• 💰 Property values are in freefall: The Montgomery Ward building just sold for $421 million less than its 2018 purchase price, signaling a market correction.

• 🏢 Hybrid work reshapes demand: Chicago office visits were 47% lower in January 2025 versus pre-pandemic levels, reducing tenant demand for large spaces.

• 🚀 Google offers a rare bright spot: The tech giant’s Thompson Center HQ could help stabilize downtown real estate—if it drives enough occupancy growth.

Why Commercial Property is at a Turning Point 🏢 read the full 842-word article here

Article published: February 27, 2025

After years of uncertainty, commercial real estate may finally be stabilizing. Real estate investment trusts (REITs) are reporting rising operating incomes, and valuations appear to have hit bottom. With interest rates peaking and supply constrained, investors are cautiously optimistic about the next phase of the market cycle.

Industrial and retail assets are leading the recovery, posting valuation gains, while the office sector continues to struggle. Major landlords, including GPT and Charter Hall, see early signs of a turnaround but stress that recovery will vary across sectors. Meanwhile, data centers and healthcare real estate emerge as hot investment areas, attracting major capital inflows.

However, the recovery won’t be uniform. Rising rents and constrained supply are fueling strong performance in industrial and logistics, but office spaces still face weak demand and declining valuations. The key question: Will the return-to-office trend be strong enough to revive office markets, or is a permanent shift already underway?

Key Takeaways:

• 📉 Office valuations remain under pressure: While industrial and retail properties saw small gains, office values fell another 3.5%, continuing their post-pandemic slump.

• 💰 Rising rents boost industrial real estate: Logistics properties reported leasing spreads of up to 50%, as demand outpaces supply in urban centers.

• 🏢 Retail space is rebounding: Scarce availability is pushing shopping center rents up, while foot traffic steadily increases post-pandemic.

• 🚀 Data centers and healthcare real estate thrive: Investors are pouring billions into these high-growth sectors, with double-digit rent increases expected in 2025.

Why It Matters

The commercial real estate market is no longer business as usual. Fortunes are being made (and lost) based on who’s adapting fastest. Office space vacancies are surging, industrial and retail are making a comeback, and AI is reshaping how deals get done.

The question isn’t just where the market is going—it’s whether you’re positioning yourself to win in the shift. The next 12 months will separate those who thrive from those who fall behind. Are you ready?

Until next time, keep your strategy sharp and your moves smarter. 🚀

Anne Morgan
Editor-in-Chief
Commercial Real Estate Weekly