April 2025 National Commercial Real Estate Market Update

As of April 2025, the U.S. commercial real estate (CRE) market continues to show a mixed performance across property sectors, with some areas stabilizing while others remain under pressure. Our comments within. 

Office Sector: Challenges Continue

The national office vacancy rate climbed to 19.9% in March 2025, up 170 basis points from the previous year. Tech-heavy markets such as San Francisco (28.6%), Seattle (27.5%), and Austin (28.5%) are experiencing heightened vacancies due to sustained remote and hybrid work trends. Distressed sales continue to play a role, with 10.8% of 2024 office transactions involving distressed assets. However, demand for premium office space remains in select cases, such as Deloitte’s recent 800,000-square-foot lease at 70 Hudson Yards in Manhattan.

Weitz - Not surprising at all. I don't see this changing soon. We still have leases turning over that were set before COVID and the 

Industrial Sector: Slowing Momentum

The industrial sector has cooled after a pandemic-driven boom. Net absorption dropped 42% year-over-year to 114 million square feet. Rising supply has driven vacancy rates to 7.0%, while rent growth slowed to 2.0%. Logistics facilities remain the top performer in absorption, but flex spaces are now seeing more vacancies than gains.

Weitz - this is a curious one as every assumed industrial would be the "Belle of the Ball", but I'm not shocked. I see most sectors struggling in the coming years. 

Retail Sector: Stability Holds

Retail remains the most stable commercial property type. General retail vacancy rates remain low at 2.6%, despite a 77% drop in net absorption year-over-year. Rents continue to rise modestly, with a 1.9% increase, while vacancy rates inched up by just 0.1 percentage points.

Weitz- People still need goods and services; this doesn't shock me. 

Multifamily Sector: Signs of Recovery

The multifamily sector showed strong performance, with net absorption rising 46% to nearly 551,000 units. Vacancy rates held steady at 8%, and rent growth was modest at 1.1%, indicating a balanced environment between supply and demand.

Weitz - Love multi-family especially in the outskirts. People need homes, can't afford to buy in many instances, and can work further from work typically. 

Investment Trends: Capital Eyes Distress

Investor interest in distressed assets continues to grow. Brookfield Asset Management raised nearly $6 billion in Q1 2025 to invest in undervalued commercial properties. Meanwhile, the Green Street Commercial Property Price Index dipped slightly by 0.5% in April but is up 4.3% over the past 12 months, showing long-term optimism.

Weitz - Not surprised at all. We are doing the same (on a much smaller scale albeit). 

Conclusion

Overall, April 2025 paints a cautiously optimistic picture. While office markets continue to lag, other sectors—particularly multifamily and retail—show signs of resilience. Investors are increasingly positioning themselves to capitalize on distress, suggesting potential opportunities in the months ahead.

For more help with Snohomish Commercial Real Estate, please feel free to reach out to me below. We can help with purchasing, leasing and/or investment. 

Sincerely, 

Scott Weitz

Scott@WeitzCommercial.com