Executive Summary

We are pleased to present our 2025 House View. This publication is produced each year and serves two essential purposes. First, it highlights our outlook for the North American economy and the commercial real estate (CRE) sector. Secondly, it presents our strategic focus areas and approach to capture the opportunities presented in the current environment.

REPORT HIGHLIGHTS

1. Capital Markets Inflection Point: The real estate market has entered a new phase, driven by a shift in Federal Reserve policy, stabilizing valuations, and renewed transaction momentum. We highlighted the emergence of a new liquidity cycle late last summer, which is creating opportunities across sectors.
2. Real Estate & Tech-Driven Innovation: The digital economy’s growth is creating unprecedented demand for data centers. The two primary catalysts are cloud computing, which continues to be strong and stable, and generative AI, where growth is currently massive, though the long-term is less clear. E-commerce continues to reshape the logistics sector, with major players like Amazon back on the offensive after a brief pause. Simultaneously, onshoring and supply chain reconfiguration are driving demand for strategically located industrial space.
3. Power Infrastructure: Largely resulting from the unprecedented energy demand from the digital economy, the power infrastructure grid is facing a significant supply/demand imbalance. The amount of infrastructure investment required to meet this expected demand creates opportunities for multiple and unique applications, including renewables, nuclear, photovoltaic, battery systems, and new transmission and distribution solutions. These solutions are expected to be the infrastructure bridge between the power supply needed to create the traditional real estate investments that we know well.
4. Real Estate Lending: As traditional lenders retrench, private credit is stepping in to fill the gap, offering compelling risk-adjusted returns. With strategies ranging from construction lending to gap capital, this asset class is poised to capitalize on shifting capital stacks.
5. Housing: Demographic trends, coupled with a historic affordability gap, are driving sustained demand for rental housing. Multifamily assets, particularly those that have attainable rents, are positioned for long-term growth as supply. constraints intensify.