The Risk Of Looking Backward: Avison Young U.S. Capital Markets Head On Navigating A Forward-Moving Market

This year has been a roller coaster for the commercial real estate industry, as an unpredictable, quickly evolving economy has professionals constantly revising their outlook. 

While some may have initially been pessimistic about the impact of tariffs, interest rates and other economic factors, Avison Young's midyear report shows “cautious optimism,” with many sectors pivoting against uncertainty through “innovation, strategic repositioning and a renewed focus on quality and experience.” 

The key to staying ahead in 2025? According to Avison Young principal and Executive Managing Director of U.S. Capital Markets Marion Jones, it is keeping your eyes forward. 

“This is a moment in the cycle where things start moving very quickly, and my advice to all forms of transactional professionals, whether they're brokers in capital markets or acquisitions professionals or investment committee folks, is that backward-looking guidance will hurt you,” she said. 

Bisnow spoke with Jones to learn what CRE professionals should be focusing on as we enter the final months of the year and the trends she is seeing that are defining CRE in 2025. 

Bisnow: What advice do you have for navigating market uncertainty in 2025?

Jones: As the numbers came out for the first half of the year, we saw that transactional volume in the U.S. was up 25%. And we're anticipating a significant uptick for the second half of the year as well. 

Irrespective of pending rate cuts, the market cycle has turned, and I think that this is a time to be very forward-looking. Whatever fatigue you might feel from the past several years of a tough dealmaking environment, you have to jettison that sense of fatigue and refocus on what's ahead. 

Bisnow: What should we be keeping our eyes on to give us a sense of where we’re heading? 

Jones: So far in 2025, we have seen a greater diversity in lender profiles. Commercial mortgage-backed securities volume effectively doubled in 2024 over 2023, and it came back very strong in the first quarter of this year as well. We expect it will continue to gain transactional volume throughout the course of 2025 — but it’s not just about CMBSs. Life insurance companies are also lending again. 

Life companies, money center banks and CMBSs are all beginning to compete with each other and with the private credit that has been more prolific in recent years. A greater diversity in lender types almost always precedes a greater diversity of buy-side capital, and when you see that, you should expect a significant uptick both in pricing and in volume. 

Bisnow: Let’s talk about the trends you’re seeing in the capital that is getting raised — what are you noticing these days? 

Jones: The first thing is that 18 major REITs across the U.S. raised their earnings expectations and increased their likelihood of issuing dividends in Q3 2025. At the same time, several economists, including those from the International Monetary Fund and Citigroup, are revising their projections upward for the U.S. economy. 

A lot of economists revised their projections immediately following “Liberation Day,” but now they’re coming back and revising earlier projections and saying, “Actually, the incredible headwinds that we were anticipating haven't materialized.” 

Fundraising has reached about $111B in the first half of this year, compared to roughly $95B over the same period last year, and redemption queues are down significantly. This creates a snowball effect where, as transaction volume increases, that frees up money from investors on the sell side to begin deploying capital into new acquisitions. It’s a reasonable bet that we'll see an even bigger uptick in transactional volume in the second half of the year. 

Bisnow: Avison Young’s midyear CRE outlook talked about “cautious optimism across CRE,” but what are you seeing for specific asset classes?

Jones: It’s really fascinating when you look at something that was once considered an “alternative” strategy, like data centers, and see that it is now accounting for 35% of fundraising in the first half of this year. For the first time, an alternative strategy has eclipsed the multifamily sector in their ability to attract capital. 

This is partially because it is a capital-intensive sector, but regardless, eclipsing multifamily, which is traditionally the darling of fundraising, is a meaningful development. We're extremely interested in and bullish on the data center space.

Fundraising for multifamily accounted for 34% of fundraising in the first half of this year, so it is still a favored asset class. I think it's interesting to note that, as sensitive to interest rates as the multifamily space is, transactional volume surged 140% in the first half of this year, and that was before any interest rate cuts. 

As for office, we’re seeing that in certain markets like San Francisco, the headlines will paint a picture around a distressed office market, but for the competitive set of buildings within that marketplace, the availability is near zero. It's almost like a two-tier category for office: the office that is in demand and that will continue to be office long-term, and then the rest is almost a different category or a different class that is ripe for conversion. 

We've seen an uptick in foreign investors who are deploying capital into vehicles geared for U.S. office, and as I said, greater diversity in the lending space always indicates the arrival of greater diversity on the buy side. Sometimes your neighbor sees your strengths faster than you do, and the interest in U.S. office from offshore capital is an interesting development.

Bisnow: What does Avison Young hope to achieve in 2025? 

Jones: We have an incredibly talented group of capital markets professionals, and our overarching goal is to be the best-in-class service providers in the $25M to $100M deal space. We have the right talent in place to do that, and we are prepared to grow. 

We are actively recruiting and hiring. The primary focus for us is to bring on great people who can fit into our culture of integration across our service lines, so we can continue to give our clients the most seamless experience possible. 

This article was produced in collaboration between Avison Young and Studio B. Bisnow news staff was not involved in the production of this content.

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