Best Commercial Real Estate Investments in 2025:
Where to Put Your Money for Maximum Returns
The commercial real estate market is evolving rapidly, with major shifts in financing, property demand, and investor sentiment. With $957 billion in commercial mortgage loans set to mature in 2025, and new loans only expected to cover just under 61% of expiring debt, many investors are wondering: Where should I put my money for the best returns?
What are the best commercial real estate investments? While some areas, like commercial office spaces, are still seeing challenges, experts believe the market is stabilizing and certain sectors are primed for strong growth. If you’re looking for the best commercial real estate investments in 2025, this guide will break down the top opportunities that offer high potential returns, lower risks, and long-term stability.
1. Multifamily Properties: The Safest Bet for 2025
PRO TIP:
If you’re new to multifamily investing, look for value-add properties where you can increase rental income through renovations or improved management.
Why it’s a great investment: Multifamily properties continue to be one of the most resilient asset classes in commercial real estate. With rents increasing at a minimum of 5% per year, this sector provides stable cash flow and long-term appreciation.
Key Trends:
High Demand: The U.S. faces an ongoing housing shortage, making rental properties more attractive to both tenants and investors.
Easier Financing: Multifamily loans are generally easier to secure than other types of commercial financing, as lenders prioritize properties with strong rental income.
Less Risk: Compared to office or retail spaces, multifamily properties have lower vacancy risks because housing remains an essential need.
Pro Tip: If you’re new to multifamily investing, look for value-add properties where you can increase rental income through renovations or improved management.
2. Industrial Real Estate: The Powerhouse of Logistics
Why it’s a great investment: E-commerce and supply chain demands continue to fuel the need for distribution centers, last-mile logistics hubs, and manufacturing spaces. Industrial real estate has proven to be one of the most recession-resistant sectors, with low vacancies and rising lease rates.
Key Trends:
Growth in E-Commerce: Companies like Amazon and Walmart are expanding warehouse space to meet growing online shopping demand.
Last-Mile Delivery Boom: Retailers need smaller distribution hubs near urban centers to facilitate faster deliveries.
Strong Occupancy Rates: Industrial spaces have some of the highest occupancy levels across all commercial real estate sectors.
Pro Tip: Focus on properties near major transportation hubs or ports to attract long-term corporate tenants.
3. Mixed-Use Developments: The Future of Urban Real Estate
Mixed-Use is one of the best real estate investments of 2025! Why it’s a great investment: Mixed-use developments combine residential, retail, office, and entertainment spaces into a single property, creating dynamic, walkable communities. These properties cater to modern consumer preferences for convenience and lifestyle-focused living.
Key Trends:
Live-Work-Play Demand: Millennials and Gen Z prefer mixed-use environments that offer work, shopping, and entertainment within a single space.
Diversified Income Streams: Since mixed-use properties generate revenue from multiple sources (rent, retail sales, office leases), they offer more stability.
Zoning Flexibility: Many cities are encouraging mixed-use developments to revitalize downtown areas and suburban hubs.
Pro Tip: Look for mixed-use developments with strong anchor tenants (grocery stores, gyms, or medical offices) to ensure long-term viability.
4. Hotel-to-Residential Conversions: A Hidden Goldmine
Why it’s a great investment: With fluctuating hotel demand in certain markets, many investors are purchasing outdated hotels and converting them into multifamily apartments, senior housing, or affordable living spaces. This strategy capitalizes on existing infrastructure, reducing construction costs while meeting high rental demand.
Key Trends:
Fix-and-Retain Model: Investors renovate and hold properties for long-term rental income rather than selling immediately.
Cost-Effective: Hotel rooms already have bathrooms and layouts conducive to apartment conversions, reducing renovation expenses.
High ROI Potential: Cities with affordable housing shortages are offering incentives for developers converting hotels into apartments.
PRO TIP
Target older hotels in strong rental markets where zoning laws allow for residential conversions.
Pro Tip: Target older hotels in strong rental markets where zoning laws allow for residential conversions.
5. Medical and Healthcare Real Estate: A Growth Sector with Stability
Why it’s a great investment: Healthcare real estate, including urgent care centers, outpatient clinics, and senior living facilities, is booming due to an aging population and rising healthcare needs. These properties offer long-term, stable tenants with recession-resistant demand.
Key Trends:
Medical Office Demand: More doctors are shifting away from hospital-based care to private medical offices.
Senior Housing Growth: Assisted living and memory care facilities are expanding rapidly due to increased demand from the baby boomer generation.
Telemedicine Impact: The need for flexible healthcare spaces is growing as telemedicine changes how and where medical services are provided.
Pro Tip: Invest in properties near major hospitals or in high-growth retirement communities for maximum tenant stability.
6. Retail Revival: Investing in Experience-Driven Spaces
Why it’s a great investment: While traditional retail has faced challenges, experience-based retail is seeing a resurgence. Shopping centers with entertainment, dining, and fitness components are attracting consumers looking for social experiences rather than just transactions.
Key Trends:
Grocery-Anchored Retail Centers: Essential retail (groceries, pharmacies, and specialty food stores) continues to thrive.
Experiential Retail Growth: Spaces that incorporate entertainment, such as movie theaters, fitness centers, and immersive experiences, are seeing higher foot traffic.
Adaptive Reuse of Malls: Many struggling malls are being repurposed into mixed-use or office spaces, presenting investment opportunities.
Pro Tip: Look for retail centers with strong foot traffic and a mix of essential businesses that can withstand economic fluctuations.
Experience-based retail is seeing a resurgence. Shopping centers with entertainment, dining, and fitness components are attracting consumers looking for social experiences rather than just transactions.
Final Thoughts: The Best Commercial Real Estate Investments for 2025
The commercial real estate landscape is shifting, but opportunity is everywhere for investors who know where to look.
Multifamily properties remain a low-risk, high-reward investment with steady rent growth.
Industrial spaces are thriving due to e-commerce and supply chain demand.
Mixed-use developments offer long-term stability and diverse revenue streams.
Hotel-to-residential conversions present high ROI potential for creative investors.
Healthcare real estate provides recession-resistant, long-term tenants.
Retail investments focused on experience-driven spaces are making a comeback.
With $957 billion in commercial mortgage loans maturing in 2025, financing is shifting, and many lenders are looking at debt service ratios and property viability more than ever before. If you’re considering a commercial real estate investment, now is the time to explore your options.
Want to discuss your investment strategy? Complete the form on our website, and let’s find the right commercial real estate opportunity for you!
Author Tom Sebring
Seasoned commercial real estate expert with a deep understanding of market trends, financing strategies, and investment opportunities.
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