Brian Klinksiek thinks we’re turning a page to a new market in 2025.
“Even with what’s happened with long interest rates, there’s so much other stuff,” says Klinksiek, the global head of research and strategy at LaSalle Investment Management.
“We’ve got prices more in line with where bond markets are… we have valuations that have caught up with prices, the denominator effect that is resolved, you’ve got property market fundamentals improving for the beat-up sectors.”
The new market makes real estate investing more complex, according to Klinksiek. The task in 2025 involves selecting from a more extensive breakfast menu of options, similar to that of a New York diner—so-called, Klinksiek says, because while there’s a lot of choice, some of them are a little dodgy, and you certainly don’t want all of them.
Making the correct selections on where to invest is more difficult when more sectors are returning to investability.
Take office, Klinksiek says. During the pandemic, the link broke down between office-using job creation and occupied square footage.
“And what we see now is the beginning of it starting to reassert itself—the link is coming back.” Which means that Klinksiek expects people returning to office “will start to eat away at the mound of vacancies” in 2025.
He also likes data centers in the short term, although he believes that innovation will limit the sector’s growth at some point in future.
Key Moments
00:00 AFIRE CEO Gunnar Branson intro
01:24 How should investors approach CRE trends in 2025?05:02 Will office surprise investors in 2025?
08:52 Will data centres continue to be the star player in CRE in 2025 despite scarcity?
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The AFIRE Podcast with Gunnar Branson is the official, multiple-award-winning podcast of AFIRE, the association for international real estate investors focused on commercial property in the United States.
Hosted by AFIRE CEO Gunnar Branson, the podcast features informative and in-depth conversations with experts across the full spectrum of real estate, investment, sustainability, economics, geopolitics, and urbanism with a focus on helping each other become Better Investors, Better Leaders, and Better Global Citizens. To learn more, visit afire.org/podcast
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