2025 Real Estate Mid-Year Outlook

Jul 29, 2025

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CRE Bright Spot within Murky Macro Backdrop

The current macroenvironment is volatile and uncertain with growth expected to moderate and diverge. Within this macro backdrop, real estate looks durable and downside-protected, particularly in sectors that are supported by long-term structural trends. Several factors suggest this is an attractive time to invest in real estate: meaningful downward re-pricing (20 to 25% across regions) which enables an attractive entry basis, positive core returns across regions for the past four quarters suggesting the market has bottomed and the next up cycle has begun, and significantly lower new supply due to the pullback in construction starts which will be supportive of fundamentals.

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Morgan Stanley Real Estate Investing

Morgan Stanley Real Estate Investing (MSREI) manages global value-add / opportunistic and regional core / core-plus real estate investment strategies. The team's experience encompasses a broad array of asset classes, geographic regions and investment themes across all phases of the real estate cycle.

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