Navigating the U.S. Commercial Real Estate Market in Q3 2024: Challenges and Opportunities

As we approach the midpoint of 2025, the U.S. economy is clearly entering a new phase. Growth is slowing, consumer behavior is shifting, and commercial real estate dynamics are evolving faster than ever. At Launch Commercial, we believe staying ahead of these shifts is not just an advantage — it’s a necessity. The U.S. economy is showing signs of a significant slowdown. GDP growth is projected to fall to 1.3% this year, a sharp decline from 2.8% in 2024, according to BNP Paribas. Unemployment is inching upward, with a 4.5% rate expected by year-end, based on forecasts from EY and Comerica. Consumer spending, particularly among middle-income households, is weakening, as discretionary expenditures continue to tighten. The post-pandemic expansion phase has concluded, and what lies ahead is a period of slower, more volatile economic growth. This raises an important strategic question for businesses and investors alike: Which sectors are most vulnerable to a contraction in consumer spending? Inflation and interest rates remain central themes in the 2025 economic narrative. Core inflation is expected to stabilize around 2.8%, according to the Federal Reserve, while the Federal Funds Rate is projected to hover near 3.9% throughout the year. Federal Reserve Chairman Jerome Powell noted, “The fight against inflation is not over, but our tools are properly calibrated.” With rates expected to remain elevated, a critical consideration is emerging: What are the potential risks of maintaining higher rates over an extended period? Trade policy developments are adding further complexity. As of April 2, 2025, the United States enacted comprehensive tariffs on Chinese and European imports. The immediate market response has been pronounced, with the S&P 500 down 6.5% year-to-date and the Nasdaq down 11%. The re-emergence of protectionist policies is fueling market volatility and forcing global economic recalibrations. Against this backdrop, investors and business leaders must ask: Which industries stand to benefit — and which may suffer — in the new trade environment? Consumer sentiment is continuing to weaken. Gallup’s Economic Confidence Index remains deep in negative territory at –22, while 53% of Americans report that their financial situation has worsened. This steady decline in consumer optimism is already reshaping purchasing patterns, investment strategies, and market forecasts. The question now becomes: How might declining consumer sentiment alter corporate investment and expansion strategies in the coming quarters? In commercial real estate, asset performance is diverging sharply by sector. Office vacancy rates are projected to rise to 24% nationally by 2026, according to CommercialEdge. In contrast, industrial properties remain resilient, with vacancy rates holding steady at around 4.7% based on NAIOP data. Meanwhile, multifamily rent growth is decelerating to an annual pace of 2.1%, according to Yardi Matrix. Spencer Levy of CBRE summarized the situation well, stating, “Commercial real estate is diverging faster than ever — survival now depends on asset type and market.” Looking ahead, an important question is surfacing: Are suburban retail centers and adaptive reuse projects poised to drive the next wave of CRE investments? Looking at the broader investment climate, the risk of recession has climbed to a 60% probability within the next 12 months, according to Bloomberg Economics. CRE investment activity is projected to decline by approximately 15% year-over-year, according to CBRE’s latest reports. As Treasury Secretary Janet Yellen noted, “The economy is not broken — but it is bruised.” Given the backdrop of slower growth, shifting consumer behavior, and rising recession risk, investors must weigh a critical decision: Should they prioritize liquidity preservation or pursue opportunistic acquisitions? The final takeaway for businesses and investors is clear. Resilience and adaptability will be critical differentiators in the months ahead. Those who manage liquidity with discipline will be better positioned than those who remain overleveraged. Informed, data-driven positioning — not guesswork — will define success in this evolving market. At Launch Commercial, we are committed to helping our clients navigate the complexities ahead. Stay strategic. Stay informed.

In this shifting commercial real estate landscape, some of us are navigating a market correction for the first time, while others are facing new challenges in familiar cycles. This month’s State of the Market call took a different approach—focused less on headlines, more on context, and grounded in the actions that matter now. If you missed the session or want to revisit key points: 

The commercial real estate business demands more than strong sales skills. Sustained growth requires systems, strategy, and the ability to scale without compromising your time or client experience. Yet for many agents and brokerages, growth plateaus because of three persistent operational challenges. These issues don’t just slow you down—they limit how far your business can go.

In today’s ever-evolving real estate landscape, uncertainty is the only certainty. At Launch Commercial , we help brokers, agents, and investors navigate market shifts by providing data-driven insights, strategic planning, and industry expertise. With commercial real estate facing both challenges and opportunities in 2024, staying ahead requires a proactive approach.  This article breaks down key market trends, economic indicators, and actionable strategies to ensure that you thrive—not just survive—in this changing environment.

The commercial real estate (CRE) market is set for an exciting year in 2025, with new opportunities emerging across multiple asset classes. While economic conditions remain dynamic, the outlook suggests a steady trajectory of growth fueled by consumer spending, easing financial conditions, and evolving investor strategies. In this blog, we break down key insights from Launch CRE's Monthly State of the Market Call to help you navigate the current landscape and make informed decisions for the year ahead.

As we enter 2025, the commercial real estate (CRE) industry is navigating a landscape defined by optimism, innovation, and a deeper commitment to sustainability.

Explore the 2024 election's impact on commercial real estate, including tax changes, deregulation, and market opportunities. Stay informed and prepared for 2025.

Stay ahead in 2025 with key commercial real estate insights.

Discover how to thrive in the multifamily market as it stabilizes. Learn key strategies for market positioning, tech investment, and visual media to succeed in 2025.