Let’s cut through the noise – 2025 isn’t just another year of cautious optimism and tepid predictions. After years of market paralysis, rising rates, and deal-killing uncertainty, we’re finally seeing the pieces fall into place. The real estate industry is standing at the edge of what we’ve come to know real estate as – and the gap between winners and everyone else is about to widen dramatically.
The data tells a compelling story:
Here’s the reality check; this opportunity isn’t an open invitation, it’s a selective reset that will reward the prepared and punish the hesitant.
NYC’s office market tells a more nuanced story than the headlines suggest. While over 80% of the city’s office stock was built before 2015 (Source: JP Morgan), the market has stratified into distinct segments with divergent trajectories.
Class AAA properties are thriving, with demand significantly outpacing supply in prime locations. Office credit funds focused on premium assets are seeing exceptional performance, underscoring the market’s appetite for top-tier space. The Class B story isn’t binary – properties in strong submarkets with the right amenities and recent upgrades are performing well, proving quality and location still drive value regardless of class designation.
The conversion story is equally nuanced. Currently, 8 million square feet of office space is in the conversion pipeline, with another 9 million square feet under evaluation. These conversions are purely driven by highest and best use calculations – predominantly residential where feasible, though some properties are finding alternative uses where market dynamics support them. However, conversion isn’t a universal solution. For properties where physical constraints or market conditions make conversion unfeasible, the future remains uncertain.
The data that powers real estate is vast, complex, and continuously transformed throughout its lifecycle. As operating models evolve, portfolios expand across asset classes and geographies, and stakeholders demand deeper insights, the pressure for better information management intensifies. But what the industry has instead is a complex tapestry of data points originating from countless processes executed across multiple groups.
While AI dominates headlines as the magic button, it’s crucial to understand that artificial intelligence isn’t an end in itself – it’s a tool that needs to be anchored in real business challenges and opportunities. The goal isn’t perfect data (it never will be), but rather data good enough to drive better decisions. In fact, AI’s real power lies in its ability to work with imperfect data, identifying patterns and trends in the margins that human analysis might miss. The key is starting with clear use cases tied to actual business needs, then leveraging AI to fill in the whitespace where traditional analytics fall short. (More on this in our eBook, Whoever Wins Data, Wins AI.)
The path to transformation isn’t about blind investment in technology – it’s about making strategic moves that build upon each other. Here’s where to start:
The real estate industry talks about change but remains as immovable as the steel and concrete it trades in. While conference rooms buzz with discussions of digital transformation and AI revolution, most firms are perfectly content operating in their comfortable reality of fractured data and legacy processes.
Think of it as your Matrix moment. The blue pill lets you continue in this artificial existence where incomplete data, manual workarounds, and gut feelings rule the day. It’s comfortable. Familiar. The red pill? That’s reality – a world where you see your data for what it really is, where you confront the uncomfortable truths about the information powering your portfolio decisions.
Here’s the thing about truth: once you glimpse it, there’s no going back. Once you understand what pristine, trusted data can do for your business, you can’t un-know it. That quarterly report you’ve relied on for years? You’ll see the gaps. That acquisition model? You’ll question its assumptions. That gut feeling that’s served you so well? You’ll want data to back it up.
The choice is yours, but know this: you’re already in too deep. You’ve read this far, which means you suspect something isn’t quite right with your data. That doubt? It’s the first crack in the facade. You can patch it over, take the blue pill, and carry on as before. Or you can take the red pill, step through that crack, and discover just how deep the data rabbit hole goes.
This is your moment. Welcome to reality.
Let’s cut through the noise – 2025 isn’t just another year of cautious optimism and tepid predictions. After years of market paralysis,
By Margaret Guelzow, Head of Client Experience
The early days of 2025 have been marked by transformative M&A announcements that underscore the growing importance of flexible workspaces in the real estate sector.
Transparency is critical in building trust, especially in the multifamily industry. To advance this goal, the Real Estate Technology and Transformation Center (RETTC) has opened a public review period for updates to the Multifamily Information Transaction Standards (MITS).
