Commercial Real Estate Market Analysis by Mordor Intelligence
The global commercial real estate market holds a value of USD 6.22 trillion in 2025 and is forecast to reach USD 8.29 trillion by 2030, registering a 5.91% CAGR during the period. This growth reflects the rising convergence of property investment with technology infrastructure, especially data-center and logistics assets that support digital commerce. Capital keeps flowing from sovereign wealth and pension funds—over USD 180 billion each year—into income-producing buildings as investors rotate away from volatile equities. Demand remains buoyant for mixed-use communities, transit-served sites, and ESG-ready facilities that balance resilience with sustainability. Structural headwinds such as hybrid work patterns, construction-cost inflation, and insurance premiums tied to climate risk are encouraging adaptive-reuse projects and smarter asset-management technology, making the commercial real estate market more efficient and transparent.
Key Report Takeaways
- By property type, offices led with 34% of commercial real estate market share in 2024, whereas logistics & industrial assets are set to expand fastest at a 6.21% CAGR to 2030.
- By business model, sales transactions accounted for 68% revenue in 2024; the rental model is projected to grow most rapidly at a 6.39% CAGR through 2030.
- By end-user, corporates & SMEs contributed 59% demand in 2024 and are advancing at a 6.15% CAGR, reflecting workplace optimization needs.
- By region, Asia-Pacific captured 32% revenue in 2024, while South America is expected to post the highest 6.26% CAGR to 2030.
Global Commercial Real Estate Market Trends and Insights
Drivers Impact Analysis
Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
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Sovereign & pension-fund pivot toward income-producing CRE | +1.5% | Global; led by Nordics & Middle East | Long term (≥ 4 years) |
Logistics-led demand spike from omnichannel retail | +1.2% | Global; strongest in North America & Asia-Pacific | Medium term (2-4 years |
Rapid hyperscale & edge data-center roll-outs | +1.1% | Virginia, Dublin, Singapore & other hubs | Medium term (2-4 years) |
Flight-to-quality upgrading of prime CBD offices | +0.8% | North America, Europe, tier-1 APAC cities | Short term (≤ 2 years) |
Transit-oriented rezoning lifting mixed-use values | +0.7% | Metro areas in North America & EU | Long term (≥ 4 years |
Generative-AI-driven site selection boosting secondary markets | +0.4% | Early adoption in US & UK | Short term (≤ 2 years |
Source: Mordor Intelligence
Logistics-Led Demand Spike From Omnichannel Retail
E-commerce fulfillment strategies now center on last-mile facilities within population clusters, raising premiums on Class A warehouses. Amazon’s 143-acre Fort Myers land purchase underscores this logistics expansion. Retailers such as Sam’s Club, which plans 15 new stores yearly while overhauling 600 sites, blend physical and digital channels, magnifying the need for hybrid distribution hubs. Australian warehouse rents climbed 5% year-on-year in Q1 2025 amid 2.3 million m² of supply under construction. Automation-ready and energy-efficient buildings therefore command higher valuations, sustaining momentum in the commercial real estate market. Emerging ESG mandates further favor assets with rooftop solar and EV-charging infrastructure.
Flight-to-Quality Upgrading of Prime CBD Offices
Corporations increasingly prefer amenities-rich Grade A locations to engage hybrid staff, driving Tokyo office rents higher for five straight quarters in 2025. While premium towers tighten, secondary offices face vacancies, prompting city-backed conversion programs: San Francisco approved legislation to transform empty buildings into 4,400 housing units. Such adaptive reuse raises net operating income, evidenced by New Haven’s Palladium Building, whose NOI rose from USD 154,380 to USD 267,000 after conversion[1]Mayor London Breed, “Legislation to Boost Conversion of Empty Office Buildings into New Homes Downtown,” City & County of San Francisco, sf.gov. Investors targeting stressed CBD stock can unlock value through repositioning, underpinning the commercial real estate market’s resilience despite hybrid-work friction.
Sovereign & Pension-Fund Pivot Toward Income-Producing CRE
Japan’s Government Pension Investment Fund maintains a 25% real-estate allocation to safeguard liabilities. Middle-East sovereign funds channel oil proceeds into core assets abroad, and Brookfield’s SEK 95 billion (USD 8.9 billion) Swedish AI-infrastructure program typifies scale plays in technology-linked property. Blue Owl Capital’s asset-management fees grew over 30% on the back of alternative real-estate strategies. This institutional influx lifts valuations of stabilized assets and spurs co-investment vehicles across emerging economies, strengthening depth in the commercial real estate market.
Rapid Hyperscale & Edge Data-Center Campus Roll-Outs
Blackstone earmarked USD 25 billion for hyperscale facilities consuming grid-scale power, signalling exceptional space uptake. Microsoft and OpenAI’s USD 100 billion “Project Stargate” will require 5 GW of energy on a 100-acre campus, further spotlighting land and utility constraints. Cloud hyperscalers plan USD 215 billion in 2025 capex, of which Amazon alone accounts for USD 75 billion. Nordic regions attract projects due to renewable power and natural cooling. These dynamics support a specialized vertical within the broader commercial real estate market.
Restraints Impact Analysis
Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Persistent hybrid-work dampening global office absorption | -1.8% | North America & Europe | Medium term (2-4 years) |
Construction-material & financing-cost inflation squeezing yields | -1.3% | Developed markets worldwide | Short term (≤ 2 years) |
ESG-driven obsolescence risk for legacy assets | -0.9% | Tier-1 cities in Europe, North America, APAC | Long term (≥ 4 years) |
Heightened climate-insurance premia in coastal metros | -0.6% | Global coastal regions; pronounced in US Southeast | Medium term (2-4 years) |
Source: Mordor Intelligence
Persistent Hybrid-Work Dampening Global Office Absorption
Forty percent of knowledge employees remained fully or partly remote in 2024, muting net new leasing. Goldman Sachs projects materially higher vacancies by 2030. Downtown Seattle’s comeback is fragile, underscoring foot-traffic shortfalls that weigh on urban revenues. Portland’s valuation slump produced a USD 92.8 million municipal budget gap. Banks extend loans to avoid write-downs, with Fed researchers flagging 4.8-5.3% originations decline since 2022[2]Andrew Haughwout, “Extend-And-Pretend in the U.S. CRE Market,” Federal Reserve Bank of New York, newyorkfed.org. Conversions to housing provide relief, though each unit in Los Angeles can cost USD 240,000 to deliver.
Construction-Material & Financing-Cost Inflation Squeezing Yields
Higher interest rates push would-be buyers into leasing, boosting occupancy yet pinching developer returns. Fitch foresees weakening collateral in North-American securitizations as refinancing risks mount. Canada’s rate cut to 3.25% has revived transaction pipelines among institutions. Material price swings delayed the Palladium conversion by five months and lifted costs 34%. Larger sponsors with access to alternate capital therefore gain share in the commercial real estate market, while prefabrication gains traction to tame cost overruns.
Segment Analysis
By Property Type: Logistics Surge Reshapes Traditional Hierarchies
The offices segment held commercial real estate market share of 34% in 2024. Logistics and industrial assets are forecast to grow at a 6.21% CAGR. Amazon’s plan to power Oregon data centers with advanced nuclear technology underscores a convergence of logistics and energy infrastructure. Store-closure headwinds weigh on traditional retail, yet experiential formats and omnichannel pickup points open reuse pathways. Hotels rebound alongside tourism, while data centers crystalize into a high-power sub-class within commercial real estate market size metrics.
Mixed-use projects protect cash flow by layering residential, retail and workspace. Georgetown’s USD 16.5 million mill conversion into riverfront apartments plus retail illustrates value-add potential. Tokyo’s BLUE FRONT SHIBAURA twin towers reinforce premium for multi-purpose destinations. Industrial landlords embed solar and EV infrastructure to meet tenant ESG targets, strengthening resilience and positioning for higher rents inside the commercial real estate market.
Note: Segment shares of all individual segments available upon report purchase
By Business Model: Rental Flexibility Gains Momentum
Sales transactions preserved 68% revenue in 2024, feeding portfolio-recycling demands of capital-intensive investors. Rental income streams are poised for a 6.39% CAGR, underlining corporate appetite for operating-expense over capital-expense commitments. Equity Residential’s portfolio logged 3% same-store revenue growth in 2024 and guides 2.25-3.25% for 2025, spotlighting healthy occupancy[3]Corporate Communications Team, “Fourth Quarter 2024 Results,” Equity Residential, finance.yahoo.com. Build-for-rent single-family communities, like Tricon’s Texas launches, attract households priced out of ownership.
Sale-leasebacks combine liquidity with operational control, evident in Hines’ USD 194 million DST for Cincinnati’s Rookwood center[4]Corporate Communications Team, “Successfully Completes USD 194 Million DST,” Hines, hines.com. Lease clauses now incorporate performance-based rent and sustainability metrics. As a result, the commercial real estate market size tied to rental structures widens.

By End-User: Corporate Optimization Drives Demand
Corporates and SMEs accounted for 59% demand in 2024 and will grow at a 6.15% CAGR, a function of footprint consolidation paired with quality upgrades. Companies tailor workspaces for collaboration zones and smart-building sensors, reinforcing the technology layer embedded in the commercial real estate market.
SMEs flock to flexible centers that avoid long leases, while public agencies commission specialized education and health facilities. China’s designation of 15 new first-tier cities, including Chengdu and Hangzhou, expands domestic office and retail requirements. Senior-housing REITs ride demographic waves as baby boomers age, expanding a niche yet fast-growing slice of the overall commercial real estate market.
Geography Analysis
Asia-Pacific retained 32% of 2024 revenue, supported by urbanization and near-shoring. Tokyo’s Grade A rents rose for five consecutive quarters, and prime logistics equities posted 10.1% stock gains in Q1 2025. CBRE’s 2025 investor survey shows half of respondents plan heavier exposure to Australia, Korea, Singapore, Hong Kong and especially Tokyo. Chinese consumer caution tempers discretionary retail; nonetheless, Chengdu and Hangzhou’s upgraded status spur new mall and office starts. Australia’s warehouse premium-rent trajectory, at 5% year-on-year, underlines ongoing preference for automation-ready sheds.
South America hosts the fastest 6.26% CAGR through 2030, buoyed by infrastructure and commodity cycles. Mexico captured record USD 36 billion FDI in 2023 on supply-chain relocation, lifting industrial pre-leases near the United States. Brazil’s 2025 GDP is set for 2.4% growth, and social-commerce uptake via TikTok Shop requires extra fulfillment square footage. Cancún’s 14% house-price climb and 30% luxury-condo demand increase by 2027 mirror tourism-led appetite for mixed-use schemes. Argentina’s macro stabilization and Peru’s USD 3.6 billion port upgrades extend the industrial corridor, expanding commercial real estate market size for logistics developers.
Europe presents mixed signals. Germany’s residential-investment market is rebounding, while Austria saw prime rents break EUR 20/m² in three states due to undersupply. Private-equity outlook brightens across software and pharma clusters, improving real-estate exit timelines. France anticipates steadier 2025 volumes as logistics assets regain investor favor, though older offices still languish. Middle-East diversification injects capital into African and European portfolios: Saudi Arabia permitted foreign stakes in sacred-city REITs and Egypt green-lit a USD 1 billion hydrogen-powered skyscraper. Tokenized Dubai deals illustrate how fintech can redraw capital flows inside the commercial real estate market.

Competitive Landscape
The commercial real estate market remains moderately fragmented; yet scale operators wield advantages in cost of capital and technology adoption. Blackstone channels USD 25 billion into AI-linked data-center campuses and closed a USD 23 billion ports platform, revealing appetite for long-duration infrastructure. Brookfield’s EUR-scale transactions such as the Swedish AI infrastructure pipeline further consolidate niche segments. Prologis retains leadership in logistics, while Simon Property Group commands marquee malls, showing how domain specialists still thrive.
Advisory firms CBRE, JLL and Cushman & Wakefield compete on prop-tech portals that integrate lease data, energy dashboards and valuation tools, enhancing stickiness with clients. BlackRock’s USD 3.2 billion Preqin acquisition extends data coverage across private-market real estate, widening analytics depth for multi-asset investors. Agile disruptors include build-for-rent players, AI platform providers and crypto-enabled brokers that facilitate fractional ownership in places like Dubai.
Geographic specialization persists: Nordic data-center clusters revolve around renewable grids; U.S. Sunbelt multifamily scales through institutional sponsors; and Latin-American industrial corridors flourish via near-shoring. This mosaic of strategies highlights the breadth of the commercial real estate market and signals future deal flow concentrating around technology, energy resilience and demographic shifts.
Commercial Real Estate Industry Leaders
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Brookfield Asset Management Inc.
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Prologis, Inc.
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WANDA Group
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Segro Plc
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Blackstone Real Estate Advisors LP
- *Disclaimer: Major Players sorted in no particular order

Recent Industry Developments
- June 2025: Brookfield unveiled a SEK 95 billion (USD 8.9 billion) initiative to expand AI infrastructure in Sweden, adding 450 MW of data-center capacity.
- May 2025: Acuren and NV5 Global announced a USD 2 billion merger, creating a larger TIC-services platform that supports infrastructure and real-estate projects.
- March 2025: BlackRock completed its USD 3.2 billion purchase of Preqin, enhancing private-market data coverage.
- January 2025: Welltower agreed to acquire over two dozen senior-housing complexes from Affinity Living Communities for nearly USD 1 billion, doubling down on aging-demographic demand.
Global Commercial Real Estate Market Report Scope
Commercial real estate (CRE) refers to property for business-related purposes or to provide a workspace rather than a living space. The report covers segmentation by Type (Offices, Retail, Industrial/Logistics, Multi-family, and Hospitality) and by Geography (Asia-Pacific, North America, Europe, Middle-East and Africa, and Latin America). The report offers commercial real estate market size and forecasts in value (USD billion) for all the above segments. The report also covers the impact of COVID-19 on the market.
By Property Type | Offices | ||
Retail | |||
Logistics | |||
Others (Industrial Parks, Hospitality, Mixed-Use) | |||
By Business Model | Sales | ||
Rental | |||
By End-User | Individuals / Households | ||
Corporates & SMEs | |||
Others (Institutions, Government, NGOs) | |||
By Region | North America | United States | |
Canada | |||
Mexico | |||
South America | Brazil | ||
Argentina | |||
Chile | |||
Rest of South America | |||
Europe | Germany | ||
United Kingdom | |||
France | |||
Italy | |||
Spain | |||
Rest of Europe | |||
Asia-Pacific | China | ||
India | |||
Japan | |||
South Korea | |||
Australia | |||
Rest of Asia-Pacific | |||
Middle East and Africa | United Arab Emirates | ||
Saudi Arabia | |||
South Africa | |||
Nigeria | |||
Rest of Middle East and Africa |
Offices |
Retail |
Logistics |
Others (Industrial Parks, Hospitality, Mixed-Use) |
Sales |
Rental |
Individuals / Households |
Corporates & SMEs |
Others (Institutions, Government, NGOs) |
North America | United States |
Canada | |
Mexico | |
South America | Brazil |
Argentina | |
Chile | |
Rest of South America | |
Europe | Germany |
United Kingdom | |
France | |
Italy | |
Spain | |
Rest of Europe | |
Asia-Pacific | China |
India | |
Japan | |
South Korea | |
Australia | |
Rest of Asia-Pacific | |
Middle East and Africa | United Arab Emirates |
Saudi Arabia | |
South Africa | |
Nigeria | |
Rest of Middle East and Africa |
Key Questions Answered in the Report
What is the current commercial real estate market size in 2025?
The commercial real estate market size stands at USD 6,223.55 billion for 2025.
Which segment is growing fastest within the commercial real estate market?
Logistics and industrial properties lead with a forecast 6.21% CAGR through 2030, driven by e-commerce and data-center expansions.
Why are rental models gaining traction over outright sales?
Corporations favor operational flexibility amid high interest rates, while institutional investors embrace steady rent cash flows, resulting in rental models advancing at a 6.39% CAGR.
Which region offers the highest growth rate?
South America tops the regional outlook with a 6.26% CAGR to 2030, supported by infrastructure investment and near-shoring trends.
How is ESG regulation affecting older buildings?
Stricter carbon-performance rules and rising insurance costs are accelerating retrofits; assets that fail to comply risk value erosion, especially in Europe and North America.
What role does artificial intelligence play in the commercial real estate market?
AI platforms streamline site selection, valuation and asset management, enabling investors of all sizes to identify secondary-market opportunities and optimize portfolios more efficiently.