The real estate industry has shifted from a state of uncertainty to one of cautious optimism and strategic value creation, reflecting a growing demand for real estate investments across sectors. That was one of the key takeaways from EXPO REAL, a significant real estate and investment event held annually in Munich, Germany that brought more than 40,000 participants from 70 countries to discuss investment strategy, capital formation, new developments, trends, innovations, and solutions in the real estate industry. Real estate professionals with Forvis Mazars connected with industry leaders, investors, clients, and center-of-influence peers and professionals. This article shares some highlights from the event.
Key themes focused on stabilization, adapting to new market realities, and addressing future-oriented topics like sustainability, technology (specifically artificial intelligence (AI) and data analytics), real estate credit, and housing. A pre-event survey showed that most attendees were neutral to optimistic about the international real estate market, marking a positive shift from several years of reserved sentiment. The shift indicates the market is entering a “settling-down phase” and slowly returning to normal, with investor interest showing tentative signs of recovery. Market leaders also noted that deal flow is slowly returning, and many felt they were at the start of a new upward cycle, contrasting with the survival mentality of previous years.
Strategic Evolution in a Stabilizing Market
Investors and developers are adapting to the new market realities of lower leverage and higher capital costs by adopting more creative and strategic approaches. The focus has moved from acquiring assets to creating long-term value through financing structures, operational efficiency, and sustainable retrofits. With traditional bank financing still tight, alternative models like private debt, hybrid financing, and mezzanine layers are moving from niche status to mainstream tools for enhancing returns. Private equity firms are also increasingly using sale-leasebacks to unlock liquidity.
In-Demand Asset Classes
While the residential and logistics asset classes remain popular, new alternative core sectors are gaining significant attention, including:
- Residential Remains Strong: Driven by demographic shifts, urbanization, and scarce supply, residential properties—in particular, affordable housing and student housing—are highly sought after.
- Data Centers Surge: The explosive growth of AI and cloud services is fueling a significant increase in investor interest in data centers.
- Return to Offices & Retail: Unlike in previous years, there is a growing—though more measured than speculative—curiosity about office and retail real estate.
- Existing Building Conversions: A popular strategy, especially in Germany and Southern Europe, involves converting existing buildings like offices and hotels into specialized living or healthcare concepts.
- Hospitality: Strong tourism demand is driving new developments and upgrades in key metropolitan markets.
- Logistics: Demand remains high in the logistics sector, supported by e-commerce and the continuous evolution of supply chain strategy. There is low vacancy in this sector, and strong fundamentals support a long-term high return on investment value.
- Private Real Estate Credit: Private credit funds are increasing their market share, offering competitive financing solutions and efficient transaction closings.
The Future-Oriented Real Estate Market
Several key issues dominated the discussion, highlighting the industry’s focus on future-proofing its strategies.
- Digital Transformation: Data-driven project development, market analysis, and AI are no longer just buzzwords. There continues to be incredible focus across the industry on meaningful use cases for how to use AI to make faster, more evidence-based decisions.
- Mature Sustainability Focus: Conversations on sustainability moved beyond compliance to focus on its financial impact, with investors demanding tougher questions about how environmental, social, and governance (ESG) frameworks support liquidity, asset value, and smarter capital allocation.
- Housing Crisis Solutions: Affordable housing emerged as a dominant topic, with the new “Flexible Housing” forum and various discussions focusing on new construction concepts and the creative use of existing properties.
A key takeaway from EXPO REAL 2025 was the increase in international investors’ interest in the U.S. market, driven by a focus on high-quality assets like industrial and multifamily properties and political changes. Foreign investors continue to diversify their risk exposure, and although we expect they will be cautious, they demonstrated a willingness to explore deploying capital into the U.S. market.
Forvis Mazars has enjoyed the opportunity to participate in EXPO REAL over the years, and it was refreshing to see a shifting tide of sentiment with a focus on value generation through responsible and creative problem solving. If you have any questions or need assistance, please reach out to a professional on our Real Estate team.