12/16/25

Our team wants to focus this blog on what our fellow commercial real estate professionals, developers, and investors should expect going into the first quarter of the new year. Here are four trends shaping the commercial real estate world as 2025 winds down.

Falling interest rates – and other reasons for optimism. The first interest rate cut of 2025 was a welcome thing on the CRE side of things, too. Even before that, the overall outlook for commercial real estate was looking brighter. In fact, CBRE was predicting a 10% spike in activity through the end of the year back in July. Investors and developers who have been sitting on the sidelines may see more opportunity to move forward on deals in the coming months.

Data centers should continue to be hot property. Not all sectors and property types are the same. That’s a given for anyone in CRE, but there’s one kind of project that should stay in vogue. Why are data centers so popular? Demand is booming thanks to artificial intelligence, cloud computing and the continued digitization of nearly every industry. Companies need more space than ever for servers and storage, and that’s translating into significant investment in this niche. Cities and towns of all kinds across the country are welcoming these projects, though actually running these centers does take a lot of infrastructure, for better or worse. Strictly from a CRE standpoint, these properties should represent one of the most attractive and competitive plays heading into 2026.

Retail remains resilient. Real estate of all kinds is always evolving, but especially retail. Despite predictions of the end of this sector going back to the 2010s, retail properties continue to adapt and evolve with changing consumer habits and the needs of store owners and operators. Although those now utilizing available retail space have certainly changed (so many big box stores and other national retailers have gone out of business over the years), actual demand for this type of property remains constant in many places.

Inflation and rising operating costs are still challenges, but the overall picture is much healthier than expected. For investors and developers, retail offers a blend of stability and opportunity, especially in mixed-use environments where retail complements office, housing or hospitality.

Local and regional trends matter in CRE, too. Our lasting advice on the residential side of things is to consult with your local experts when it comes to buying or selling a home, and that guidance applies when it comes to commercial trends. For example, while demand for office space has been uneven across the country this year, this sector is strong in the Boise, ID, market. Why? The market hasn’t suffered from speculative construction projects, and property owners have remained conservative.

This has led to a balanced market that hasn’t resulted in a high vacancy rate or widespread weak valuations. Those, of course, are two things that can cause chaos in any commercial real estate sector. No matter the national trends or headlines, it’s key to know what’s happening in the market of any kind of property you’re trying to buy or sell.

Our team is here to lend our title and escrow expertise on whatever kind of property you are dealing with. The professionals inside your local branch are here for all your office, retail, industry or agricultural needs!