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CHICAGO - Commercial real estate markets are expected to remain resilient despite challenges from higher tariffs and policy uncertainty, according to Cushman & Wakefield’s (NYSE: CWK) Midpoint 2025 Outlook released today.
The report indicates that while investment activity remains below historical averages, momentum is building as long-term interest rates stabilize and the pricing gap between buyers and sellers narrows. Despite the company’s stock declining about 31% over the past six months, InvestingPro analysis suggests the company is currently undervalued, with multiple ProTips highlighting its investment potential. For detailed valuation metrics and 10+ additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.
"Even now, amidst the uncertainty, the capital markets are continuing to thaw, capital is plowing back into the property sector, and leasing fundamentals are largely holding up well," said Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting at Cushman & Wakefield.
The industrial sector faces near-term headwinds from trade tensions but is expected to benefit long-term from e-commerce expansion and supply chain restructuring. Markets that experienced aggressive development cycles are seeing temporary oversupply conditions.
Multifamily fundamentals remain solid with healthy occupancy and sustained rent growth. Institutional investors are selectively re-entering this space, attracted by improving yield spreads and structural housing shortages.
In the office sector, net absorption is improving, though still negative in many markets. The report notes a persistent flight to quality, with newer, amenitized buildings capturing more leasing activity while legacy office stock faces obsolescence risks.
Retail continues to show resilience backed by steady consumer spending, with necessity-based and experiential retail outperforming mid-tier formats. Vacancy rates have stabilized in prime locations.
"Although 2025 will undoubtedly be a choppier year, CRE was positioned for continued recovery," said Kevin Thorpe, Global Chief Economist at Cushman & Wakefield, according to the press release.
The outlook suggests property markets should gain more momentum in 2026 as stronger economic growth emerges.
In other recent news, Cushman & Wakefield reported its first-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.09, compared to the forecasted $0.03. The company’s revenue reached $2.28 billion, significantly exceeding the anticipated $1.57 billion. This strong performance is attributed to a 4% increase in fee revenue and a 24% rise in adjusted EBITDA to $96 million, reflecting operational efficiency and improved profitability. The company has also focused on simplifying its organizational structure and repaid $25 million in debt, further strengthening its financial position. Analysts from Morgan Stanley and JPMorgan noted the company’s robust performance, with particular emphasis on its leasing and capital markets segments. Cushman & Wakefield anticipates continued growth in these areas, projecting mid-single-digit growth in leasing and capital markets for the full year. The company’s strategic initiatives and market recovery are expected to drive EPS growth in 2025 and 2026. Despite economic uncertainties, the company remains optimistic about its growth prospects, supported by its flexible approach to navigating market challenges.
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