Commercial Real Estate Snapshot: 2025-Q2 Insights
As we move through the second quarter of 2025, the commercial real estate market is showing fascinating shifts across different property sectors. These numbers tell a story not just about square footage and price per foot, but also about broader economic trends, investor sentiment, and consumer behavior. Let’s break down what’s happening in each category and why it matters to buyers, sellers, and investors alike. Be sure to contact Phillip Johnson directly at 919-868-3171 if you need any help or insight!
Hospitality: Strongest Performer
Median Sale Price per Sq Ft: $176.94
YoY Change: +65.72%
Median Size: 7,267 sq ft
Hospitality has taken the spotlight with an astonishing year-over-year jump of nearly 66%. This surge reflects a renewed demand for hotels, resorts, and lodging facilities as travel continues to rebound both domestically and internationally. Investors see hospitality as a prime opportunity for yield, especially with travelers prioritizing unique experiences and regional getaways. Properties in strategic locations—near business hubs, universities, or tourist corridors—are commanding top-dollar pricing.
Industrial: A Steady Workhorse
Median Sale Price per Sq Ft: $104.84
YoY Change: +5.78%
Median Size: 10,478 sq ft
Industrial continues its reliable growth story, showing modest but consistent appreciation. The demand is fueled by e-commerce, last-mile delivery needs, and regional manufacturing expansion. Although the pace isn’t as dramatic as hospitality, industrial real estate remains a cornerstone of long-term investment strategies. Buyers are often targeting larger footprints that can flexibly adapt to warehousing, logistics, and light manufacturing.
Mobile Home Parks: A Significant Correction
Median Sale Price per Sq Ft: $2.12
YoY Change: -67.03%
Median Size: 17,775 sq ft
The mobile home park sector tells a very different story. With a steep decline of over 67%, this category is undergoing a correction after years of investor enthusiasm. While mobile home parks remain one of the most affordable housing solutions in America, rising operating costs, regulatory hurdles, and limited supply of new parks are tempering valuations. Larger parcels remain available, but the price drop signals caution—savvy investors are watching for stabilization before making new moves.
Multifamily: Holding Its Ground
Median Sale Price per Sq Ft: $195.49
YoY Change: -0.36%
Median Size: 4,432 sq ft
Multifamily, traditionally one of the strongest performers, is showing near-flat performance. While not in decline, it appears to be stabilizing after years of rapid rent growth. With affordability issues pressing tenants and higher borrowing costs affecting buyers, pricing has leveled out. For investors, this stability can be attractive, especially in urban centers where rental demand remains resilient.
Office: Signs of Optimism
Median Sale Price per Sq Ft: $171.62
YoY Change: +7.59%
Median Size: 4,351 sq ft
The office sector, which has been challenged since the pandemic, is starting to show modest recovery. A 7.59% year-over-year rise indicates buyers are finding opportunities in well-located, amenity-rich spaces. Companies are rethinking how they use office space, with hybrid models fueling demand for smaller, flexible, high-quality footprints. While large-scale office towers may still struggle, boutique and suburban office spaces are carving out a niche comeback.
Retail: Steady Resilience
Median Sale Price per Sq Ft: $212.81
YoY Change: +4.16%
Median Size: 4,993 sq ft
Retail, once thought to be in decline due to online shopping, has continued to show resilience. Neighborhood centers, grocery-anchored plazas, and lifestyle retail developments are thriving. Consumers are favoring experiences, dining, and service-oriented businesses that cannot be replaced online. This explains the steady 4% increase, reinforcing retail as a balanced and dependable sector for investors.
Self Storage: A Cooling Trend
Median Sale Price per Sq Ft: $79.93
YoY Change: -5.94%
Median Size: 13,800 sq ft
Self storage had enjoyed tremendous growth during the pandemic, as people downsized, relocated, and reorganized. Now, the sector is seeing a slight pullback. Prices are down nearly 6% year-over-year, but demand remains steady overall. The correction may be less about reduced demand and more about recalibration after years of rapid expansion. For long-term investors, self storage still offers a defensive play, though entry pricing is softening.
What This Means for Buyers and Investors
Short-Term Opportunities: Hospitality and office are seeing meaningful appreciation and could offer strong returns for early movers who identify quality locations.
Long-Term Stability: Industrial and multifamily remain pillars, offering consistent growth and reliable demand.
Caution Zones: Mobile home parks and self storage require careful analysis. Both sectors are adjusting after cycles of intense investor activity, creating potential value plays but also risk.
Retail’s Reinvention: With steady growth, retail is proving it still has a critical place in community development, especially when tied to experiences.
Final Thoughts
The numbers show us a market of contrasts - booming in some sectors, stabilizing in others, and correcting where enthusiasm once overheated values. For consumers, this means opportunities vary widely depending on the property type and location. For investors, diversification across sectors remains key, with a sharp eye on macroeconomic trends, financing costs, and shifting consumer habits.
If you’re considering entering or expanding in the commercial real estate market, these trends provide both cautionary signals and promising opportunities. The right strategy - guided by a deep understanding of the numbers - can turn today’s market volatility into tomorrow’s success.
