CRE Leaders Talk Low Supply And Robust Logistics Sector

The past few years have been difficult for many commercial real estate players, with high interest rates and new tariffs fueling volatility and uncertainty.

Still, several leaders say conditions in their markets are improving — and even creating chances to play offense. That outlook emerged during a panel at CREtech New York 2025, moderated by Vaibhav Gujral, senior partner at McKinsey & Company. Panelists included Stephen Yalof (Tanger), Toby Bozzuto (Bozzuto), Luke Petherbridge (Link Logistics), Andrew Holm (Ares Management) and Cathy Marcus (PGIM Real Estate), each offering their view of the 2025 landscape across multiple CRE asset classes.

Strong Logistics Activity and Supply Slowdown Create Tailwinds

Despite ongoing economic uncertainty, Petherbridge described the logistics sector as exceptionally strong. While not downplaying the economic uncertainty that exists, he sees robust activity within the logistics asset class.

“We’ve leased more space year-to-date than we did last year,” Petherbridge said, noting that Link Logistics owns roughly half a billion square feet and serves 8,000 customers — representing about 5% of U.S. economic activity.

He attributes the demand surge to what he calls the “re-industrialization of America,” fueled by data center development, e-commerce growth, and resilient consumer spending.

In the multifamily sector, Bozzuto said conditions are increasingly favorable. After a period of heavy deliveries, new supply is cooling in many cities, shifting the environment toward a “positive landlord market.”

“Depending on the city, it’s beginning to burn off,” Bozzuto said, while noting lingering oversupply in markets like Miami and Atlanta.

From the retail perspective, Yalof said new development remains scarce and closures persist, especially as department stores continue to contract.

Holm echoed the theme of dwindling new supply across the industry, paired with rising industrial leasing and improved retail performance over the past 12–18 months. Ares continues to invest across logistics, multifamily, and hospitality.

A More Cautious View

Marcus offered the most sober assessment. While transaction activity is improving, she said it remains far below expectations for 2025.

“I would hardly say capital is flooded into the market,” she noted, emphasizing that the issue isn’t credit availability.

Despite global repricing and a liquid credit environment, investor behavior has not followed the patterns typical of previous cycles.

Finding Opportunity in a Challenging Market

Even in this environment, some firms are pursuing strategic opportunities. With retail development limited, Tanger is focusing on acquisitions rather than new projects. Yalof highlighted a recent purchase in Kansas City at “40 cents on the replacement dollar,” enabled by strong capital access and data-driven analysis.

Bozzuto is taking a similar approach in multifamily, launching a fund to target high-quality Class A buildings at discounted prices.

“These down times are where you find immense opportunities,” Bozzuto said.

The overarching message: despite the uncertainty, well-capitalized players may find meaningful openings to buy, build, and reposition assets.

Looking Toward 2026

While the present remains complex, the panel expressed generally optimistic expectations for next year. Marcus summed up the sentiment: She is “very optimistic about 2026,” even if 2025 has not met her early expectations.

Source: GlobeSt