The return-to-office push is one factor fueling CRE activity.

 By Ashley Fahey – Managing Editor, National Content, The Business Journals

Commercial real estate buying and selling activity is starting to pick up, although uncertainty about the economy's direction and a lack of downward movement on interest rates and the 10-year Treasury may still be holding back some deals.

Across the U.S. markets tracked, 12,458 deals totaling $182.4 billion transacted in the first half of 2025 — a 15.2% increase in dollar volume and a 25.2% rise in transaction count compared to the first half of 2024. Multifamily and industrial deals made up the bulk of transactions completed in the first half of this year, accounting for 35.4% and 28.4% of dollar volume, respectively.

Although it didn't represent the biggest share of deals done in the first half, office sales are starting to get done with greater frequency.

"It's taken a while for this return to office to really play out," he said. "Financial services, the JPMorgans of the world, were the first to come back five days a week, but now you have even the Amazons of the world coming back to the office as well. ... There is demand for quality office space."

Even within the obsolete side of the office market, buildings are trading — usually at steep discounts — to be converted into new uses, especially residential. In some cases, those buildings are being bought, then demolished.

Nelson said it's been challenging to finance office buildings with significant vacancy, but within well-leased office space, the debt markets are starting to open up.

"To have debt financing and equity now willing to make a move on office, that’s certainly going to help boost office sales moving forward," Nelson said.

Johno Harris, senior executive vice president at Lincoln Property Co., said during a recent webinar with The Business Journals that certain Class A-minus or B-plus buildings in good locations are starting to trade.

"[The] basis is getting reset because it's either going back to the lender or it's in receivership," he said. "And at the end of the day, on a price per pound basis, it's starting to make sense."

U.S. office market is set to hit a 13-year low of 13 million square feet delivered in 2025, at the same time as tenant demand from myriad sectors — including financial, professional services and artificial intelligence — is coming back. Those tenants have demonstrated a preference for the newest, most amenitized and best-located office buildings, the supply of which is dwindling with so little new construction happening now.

But for the Class B and C side of the office market, which companies continue to exit in favor of newer properties, some investors may seize on those opportunities, especially when loans tied to those properties mature, Chin said.

Despite new momentum in the office investment market and across commercial real estate more broadly, challenges persist for investors. Chin said the the 10-year Treasury yield remains relatively high, and capitalization-rate compression is unlikely to meaningfully happen in 2025.

When broad-based tariffs were first disclosed in the second quarter, Chin said it wasn't certain what impact that would have on commercial real estate. While trade policy remains volatile and tough to predict, some investors are starting to gain confidence about moving forward on deals, and there's a lot of dry powder on the sidelines, he said.

Some are currently is forecasting 10% deal volume growth in 2025 compared to last year — a projection that may've been stronger if not for the current economic headwinds, and could ultimately be more robust if the 10-year Treasury declines this year, Chin said. The forecast still calls for an expected $247 billion in deal volume in H2 compared to $191.6 billion in H1.

Some are forecasting a more dramatic 19% uptick in office investment activity in 2025 compared to last year.

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