{"id":1004769761,"date":"2025-08-27T02:30:00","date_gmt":"2025-08-27T10:30:00","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004769761"},"modified":"2025-08-28T02:57:34","modified_gmt":"2025-08-28T10:57:34","slug":"cre-pushes-toward-recovery","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/","title":{"rendered":"CRE Pushes Toward Recovery"},"content":{"rendered":"\n

Commercial real estate, hit hard by the pandemic and subsequent interest-rate shocks<\/a>, now seems to have reached a turning point. More markets are in recovery mode as opposed to recession, according to Integra Realty Resources\u2019 2025 midyear report.<\/p>\n\n\n

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\"Anthony<\/a>
\u201cTop-tier properties in prime locations will deliver outsized returns, while older assets will trade at much steeper discounts to replacement cost,\u201d Anthony Graziano, Integra Realty Resources’ CEO, told CPE<\/em>. Image courtesy of Integra Realty Resources<\/em><\/figcaption><\/figure><\/div>\n\n\n

The research study also noted a continued bifurcation in asset performance, as capital and tenant demand illustrate a clear flight to quality, with investors and occupiers prioritizing high-performing assets. Capital is becoming more selective, with underwriting driven less by market momentum and more by long-term staying power and resilience, IRR explained<\/a>.<\/p>\n\n\n\n

There are two dominant trends across all asset classes in almost every market that will play out\u2014especially in the weakest (office) and strongest (industrial) sectors in the coming 24 to 36 months, IRR CEO Anthony Graziano told Commercial Property Executive<\/em>.<\/p>\n\n\n\n

\u201cThe first is that new construction is extremely difficult to execute,\u201d Graziano says. \u201cHigher interest rates, slower rent growth, macroeconomic uncertainty and escalating construction costs are all conspiring to slow new construction.\u201d<\/p>\n\n\n\n

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READ ALSO<\/strong>: CRE\u2019s Mixed Bag of Uncertainty and Opportunity<\/a><\/p>\n\n\n\n

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This construction slowdown benefits the supply-side equation in most markets, he said, which is having a stabilizing effect on occupancy and rental rates.<\/p>\n\n\n\n

\u201cThe second trend is a widening of value spread between the highest-quality assets in the market and everything else,\u201d Graziano said. \u201cTop-tier properties in prime locations will deliver outsized returns, while older assets will trade at much steeper discounts to replacement cost.\u201d<\/p>\n\n\n\n

Office, industrial: still on different paths<\/h2>\n\n\n\n

In the office market, according to the report, vacancy remains elevated nationally, particularly in urban cores like San Francisco and Chicago. In those cases, hybrid work schedules and downsizing continue to impact demand. By contrast, metros in the Sun Belt and other places, such as Miami, Charleston, S.C., and Boise, Idaho, are showing signs of stabilization.<\/p>\n\n\n\n

Demand tilts toward high-quality assets, reinforcing the ongoing flight-to-quality trend. The widening performance gap between Class A and commodity space is shaping both leasing and investment strategies, the report noted. New construction has slowed significantly, with activity mostly limited to build-to-suit, life science and medical office projects.<\/p>\n\n\n\n

\"Chart<\/a>
Office market cycle<\/a>. Chart courtesy of Integra Realty Resources<\/em><\/figcaption><\/figure>\n\n\n\n

The office market is starting to stabilize, Graziano noted. As the labor market slackens, more employers will demand a return to the office for their workforce\u2014so the office market is far from dead\u2014and in fact in most markets, it\u2019s in the early stages of recovery.<\/p>\n\n\n\n

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READ ALSO<\/strong>: Delivering an Office Experience That\u2019s Worth the Commute<\/a><\/p>\n\n\n\n

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The industrial sector has been red hot from a demand perspective, but speculative construction is now pencils down, Graziano said. This will provide price support for existing assets, but shifts in logistics patterns and the impact of consumer spending could negatively affect industrial values everywhere except the most land-constrained markets.<\/p>\n\n\n\n

Industrial remains healthy overall, but speculative development deliveries are pushing vacancy higher in some major markets, such as DFW, Indianapolis and Philadelphia, where new product is outpacing absorption, according to the report.<\/p>\n\n\n\n

\"Chart<\/a>
Industrial market cycle. Chart courtesy of Integra Realty Resources<\/em><\/figcaption><\/figure>\n\n\n\n

Rent growth is flattening in oversupplied areas, but remains positive in tight infill markets such as San Jose, Calif., and Richmond, Va. New starts are focusing on build-to-suit and adaptive reuse, as investors prioritize tenant durability and location quality.<\/p>\n\n\n\n

\u201cWe are entering that point in the market cycle where industrial asset values will revert to the mean,\u201d Graziano says. \u201cThis will bring greater stability and renewed investment demand back into the market after nearly two solid years of tepid activity.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Capital and tenant demand point to a clear flight to quality, according to Integra Realty Resources\u2019 latest report.<\/p>\n","protected":false},"author":1023,"featured_media":1004732631,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21748,21783,23891,21742,21747,51037],"tags":[38987,34748],"class_list":["post-1004769761","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-industrial","category-investment","category-national","category-latest","category-office","category-trends","tag-anthony-graziano","tag-integra-realty-resources-inc"],"acf":[],"yoast_head":"\nCRE Pushes Toward Recovery - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"More commercial real estate markets are in recovery as opposed to recession, according to Integra Realty Resources\u2019 2025 mid-year report.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CRE Pushes Toward Recovery\" \/>\n<meta property=\"og:description\" content=\"More commercial real estate markets are in recovery as opposed to recession, according to Integra Realty Resources\u2019 2025 mid-year report.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-08-27T10:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-28T10:57:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/Anthony-M.-Graziano-Chief-Executive-Officer-Integra-Realty-Resources.png\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Dees Stribling\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/\",\"name\":\"CRE Pushes Toward Recovery - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/Anthony-M.-Graziano-Chief-Executive-Officer-Integra-Realty-Resources.png\",\"datePublished\":\"2025-08-27T10:30:00+00:00\",\"dateModified\":\"2025-08-28T10:57:34+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/dc1e9fa4ee0430d86f8e60cd697c953c\"},\"description\":\"More commercial real estate markets are in recovery as opposed to recession, according to Integra Realty Resources\u2019 2025 mid-year report.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-pushes-toward-recovery\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/Anthony-M.-Graziano-Chief-Executive-Officer-Integra-Realty-Resources.png\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/Anthony-M.-Graziano-Chief-Executive-Officer-Integra-Realty-Resources.png\",\"width\":800,\"height\":620,\"caption\":\"Tenant demand remains strong, but any reduction in discretionary consumer spend could affect retailers, said Graziano. 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