2025 Outlook

Al Brooks, head of commercial real estate at J.P. Morgan Chase, gives his annual take on what’s in store for the industry and the marketplace. Teaser: He’s cautiously bullish even on office. Also for today: A major office conversion plan in Manhattan.

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— Tom Acitelli, Deputy Editor

The Outlook for Commercial Real Estate (Even Office) in 2025 Is Positive

Following several years of elevated inflation, muted growth and general uncertainty, commercial real estate could be positioned for an upswing. Overall, the outlook for the 2025 commercial real estate is positive. The industrial sector remains the industry’s darling. Multifamily and retail continue to perform well, although they do have vulnerabilities. In some markets, even office vacancy rates are beginning to moderate.

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Apollo, SL Green, RXR Move Forward With 5 Times Square Conversion

There is a new 942-unit office-to-residential conversion coming to Times Square. Apollo Global Management, along with co-owners SL Green Reality and RXR, have officially filed plans to convert the office building at 5 Times Square into a mixed-use residential and commercial building with a new address, 592 Seventh Avenue. The estimated cost of the conversion is $95 million, according to the filing. Plans for the conversion include several floors of residential units, coworking spaces and a party room as well as space for other amenities, including “tenant recreation rooms” and storage units, the filing shows. Commercial Observer first reported in August that the partners were exploring the possibility of converting the 39-story Times Square building.

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