BWE secured a $23.5 million loan to finance the acquisition and substantial improvement of The Edge, a 173-unit, 553-bed student housing community near the campus of Texas State University in San Marcos, Texas.

Chris Carroll, senior vice president, and Max Miller, senior analyst, both in BWE’s Chicago office, originated the financing on behalf of Campus Realty Advisors, a longtime BWE client.

The acquisition comes as Texas State sees a surge in enrollment, which has increased by 5% over the last year to bring the entire student body above 40,000.

The Edge features a mix of 1-, 2-, 3-, and 4-bedroom apartments and offers students a wide range of amenities, including a fitness center, clubhouse, and basketball court. The community is located less than a mile from the Texas State campus and features a dedicated campus bus stop, giving residents easy access to classes and other areas of campus.

As part of the acquisition, The Edge will receive numerous upgrades to improve the residents’ experiences. All units will receive new flooring, cabinets, and doors, upgraded bathroom fixtures, and improved lighting. The clubhouse, study areas, fitness center and other amenities will also receive major improvements to enhance the students’ sense of community.

Investors still view commercial real estate in the United States as a top outlet for their investment dollars. At the same time, commercial real estate professionals are optimistic about the state of the industry in the early stages of 2025.

Those are two key takeaways from the 2025 Commercial Real Estate Outlook Report released earlier this year by Coldwell Banker Commercial.

We spoke to Dan Spiegel, senior vice president and managing director of Coldwell Banker, about his company’s outlook report and the state of the commercial real estate industry. He, too, was optimistic about where commercial real estate stands today.

Here is some of what Spiegel had to say about the industry.

The Coldwell Banker Commercial outlook report mentions that leasing activity is improving in smaller office spaces. What is behind this improvement?
Dan Spiegel: There are a couple of things going on. Office leases are long-term commitments. Over the last year, five- or 10-year office leases have been coming up for renewal. Companies are still not entirely sure what is happening with their workforce and how often their employees will come into the office. That is resulting in a higher volume of smaller leases.

At the same time, smaller users like law firms and medical offices didn’t downsize much during the pandemic or after it. They are more willing to commit to longer-term office leases today. They are more likely to renew their space without worrying too much about how many of their employees are going to come to the office. They already know this. A lot of our presence around the country is in secondary and tertiary markets where there is more local decision-making from tenants and less corporate-level decision-making.

The report also mentions that leasing activity is stronger, too, in smaller offices in suburban locations. What is behind that?
Spiegel: It really depends on where those suburban offices are. Some suburban offices are seeing stronger leasing activity. Others aren’t. It’s more about the quality of the office space versus whether it is suburban or urban. The flight to quality is real. Companies are deciding that if they are renting space, they might as well rent nicer space.

Companies want to convince their employees to come back to the office. One way to do this is by providing them a higher quality space to work in. That is true in both downtown and suburban locations. The nicer, higher-quality buildings are doing relatively well, both in suburban and downtown locations. But it doesn’t mean that all suburban locations are doing well. It has to do with the quality of the space.

There are some positive signs out there in the office sector. Some older, outdated suburban office properties are being redeveloped. That’s a good sign.

We’ve heard a bit about converting outdated office space to other uses such as multifamily. That can be tricky and expensive, though, right?
Spiegel: There was an initial hope that many office buildings could be used to help solve the crunch we’re seeing for housing. But not all office buildings can be converted into apartments. A 1980s office building in a suburban office park is not a desirable place to live. It doesn’t have the attractiveness of, say, a 1920s or 1930s office building in the middle of downtown. People would like to live in a cool vintage building. There is potential there. But not so much with the basic suburban office properties.

How important are amenities when companies are striving to bring workers back to the office?
Spiegel: Amenities are absolutely important. Tenants and building owners are upping the game in the amenities war. Building owners have to think of the amenities that make a resort so attractive. They need to make their office space attractive enough so that people will want to be there and stay in the building. Amenities have been a driving force for a long time now. They are important if you want to attract and retain tenants.

The Coldwell Banker Commercial report also mentioned that the retail sector, despite some negative headlines, has been resilient since the start of the pandemic. Can you talk about that?
Spiegel: We are at the five-year anniversary of when COVID really took hold here. The hospitality and hotel sectors were all doom and gloom. We were worried about retail, too. But retail has been pretty darn resilient. Well-located, desirable retail centers are in high demand today. It’s the same thing that is true about real estate in general: location, amenities and demographics matter. If a retail center is in the right location, there is leasing demand for it.

That said, there are retailers that will come and go. There are malls that were once very popular that have come and gone. Others, like Old Orchard Mall in Skokie, Illinois, have reinvented themselves.

The demand for grocery-anchored retail remains strong. People want to go out.

Mixed-use retail is seeing a lot of leasing activity, too, right?
Spiegel: Retail centers aren’t strictly retail today. Retail centers include physical therapy, outpatient medical office or a light office use that has some foot traffic. Retail centers are no longer only about selling goods. It’s about services, too. Just look at medical offices. They are a good fit for retail centers because retail centers have abundant parking.

How about experiential retail? Are consumers still interested in that type of retail?
Spiegel: We saw earlier in the COVID recovery that people might not be keen on going back to the office but that they are happy to go out and have fun. That trend has not stopped. Because so many people are working from home they want to get out of the house and do something, be it dining or an experience. But experiential retail is just like all retail: Some will come and go. Things will be desirable and then they will fall out of favor. It is the natural flow of retail and retail uses.

Was there anything in Coldwell Banker Commercial’s forecast that surprised you?
Spiegel: I was surprised at the optimism that people have for 2025. As we approached the end of last year, there was so much uncertainty. That kills momentum in commercial real estate. Once the elections were over, people started making real estate decisions again without hesitation.

Even in unsure economic times, real estate is a hard asset. If there is a threat in the economy, people are driven to hard assets like commercial real estate. Even given that, I was surprised that people were so optimistic about commercial real estate in 2025. The weather can change quickly, but I view that optimism as positive. It shows that real estate is still desirable.

Commercial real estate is still attractive to investors, right?
Spiegel: Yes. And the United States is always the number one destination for real estate investors. Real estate is the steady asset. Now, not all commercial sectors are performing as well. Industrial was the darling for five years through 2024. It’s not undesirable now, but it has cooled down a bit. Multifamily is now desirable because of the challenges people face in the for-sale housing market. If people can’t afford a down payment or the higher mortgage interest rates of today, and if housing prices are higher, they will keep on renting. That sector remains a bright spot.

CBRE brokered the sale of 17.8 acres of land in Houston, Texas, which will soon be home to a 224,700-square-foot industrial facility, Griffin 288/West Airport.

CBRE’s Faron Wiley represented the buyer, a joint venture between Griffin Partners Income & Value Fund IV and Peakline Real Estate Funds in the transaction. Nathan Wynne with CBRE National Partners secured the equity for the project.

Located in the South Houston submarket, Griffin 288/West Airport will feature a new class A freestanding uber infill front load industrial facility. The project is expected to deliver during the second quarter of 2026, and will include 113 car parks, 61 trailer spaces, 20 future trailer parks, direct access to Highway 288 and strategic access to Port of Houston.

Wiley along with CBRE’s Billy Gold are set to handle comprehensive marketing efforts in a submarket that offers exceptional potential.

An aging population, surge in outpatient demand and the ever-present need for services near growing populations are all contributing to strong demand in the healthcare sector, according to the latest healthcare real estate report from JLL.

According to Advisory Board, outpatient volumes in the U.S. are expected to grow 10.6% over the next five years. JLL’s new 2025 Medical Outpatient Building (MOB) Perspective reveals the key trends shaping the healthcare real estate landscape, including the accelerating move toward outpatient care, rising occupancy, limited construction for purpose-built MOBs, steady rent growth, demographics driving expansion in Sunbelt markets and medical buildings offering continued stability for investors and health systems.

“These findings reflect the ongoing transformation of the healthcare real estate landscape, driven by factors such as changing patient preferences, technological advancements and demographic shifts,” Cheryl Carron, COO, Work Dynamics Americas, and President, Healthcare Division, JLL. “Health systems are taking a more active role in shaping their real estate portfolios and, along with corporate medical groups, are at the forefront of change, implementing ambitious ambulatory care strategies to improve patient outcomes and optimize their revenue streams.”

Health systems and corporate medical groups lead the outpatient shift

An aging population and increasing disease prevalence continues to drive the overall need for care. The site of care shift from inpatient to outpatient will continue as technology and patient preference is driving advances in medical care, making treatments less expensive, safer and less invasive.

Health systems are leaning into this and are expanding their real estate footprint and either acquiring or contracting with physician groups to add specialties. From 2022 to 2023, 16,000 additional physicians became employees of a hospital system, and health systems accounted for 46% of MOB leases that JLL tracked in 2024. Specialty providers comprised 31% of the MOB leases, with psychiatrists and behavioral health providers making up the largest group of these, accounting for 18% of this square footage.

“We’re seeing a clear trend of hospitals and health systems focusing on high-value services such as orthopedic and cardiovascular care,” said Matt Coursen, Executive Managing Director, Market Leader, Mid-Atlantic Healthcare Group, JLL. “These healthcare providers prioritize access, convenience and visibility for their outpatient locations, in some cases mirroring retail tactics to capture market share either via acquisition or de novo growth. Their site selection process is intricate, involving analysis of patient data, community demographics, care gaps, population growth, insurance coverage, referral networks and competitor proximity. Hence, why it is more important than ever to have a data-driven ambulatory network strategy that aligns with the real estate portfolio.”

Healthcare tenants may seek alternative spaces due to limited medical office availability

Strong demand and limited construction have driven occupancy steadily upward, with absorption for medical outpatient buildings topping 19 million square feet for the top 100 markets in Q4 2024, an increase of 15% from full-year 2023, according to Revista. MOB occupancy increased to 92.8% in Q4 2024, up from 92.4% one year prior; however, medical outpatient building construction remains subdued due to elevated costs, developers’ need for higher returns and tenants’ desire to control expenses.

Health systems led construction starts in 2024, accounting for 53% of total square footage and a significant increase from just 43% in 2019. Healthcare providers, especially those offering low- to mid-acuity services, are increasingly exploring office and retail spaces near patients or hospitals due to limited MOB availability, despite conversion challenges for high-acuity services or resource-intensive services like imaging.

“With medical outpatient building occupancy reaching new heights and construction starts lower than in previous years, healthcare tenants may increasingly consider office and retail spaces for their expansion needs,” said Dan Squiers, Executive Vice President and Healthcare Lead, Project and Development Services, JLL. “This trend is reshaping not just the healthcare real estate sector, but also impacting traditional commercial real estate markets and reflects the strategic importance of real estate in delivering cutting-edge healthcare services and optimizing patient outcomes.”

Medical outpatient rents are rising, boosting property income

MOB rents continue to rise, albeit at a slower pace from 2023 to 2024. Top-tier properties have experienced faster growth, with rents in the 90th percentile of Revista’s Top 100 markets growing at a 2.3% CAGR from 2019 to 2024, compared to 1.8% for median rates. The low availability rate of 6.9% in Q4 2024 means advertised rates don’t tell the full story, as many tenants renew in place and some spaces are not publicly listed.

Healthcare REITs are benefiting from steady NOI growth, with new lease escalations averaging 3% in 2024 and average terms of 107 months; however, tenants face challenges as rate escalations outpace year-over-year rent growth in most markets. With slim operating margins and declining reimbursements, healthcare providers are keen on cost reductions across the system, which may limit dramatic rent increases in the future.

“While medical outpatient building rents are expected to continue their upward trajectory, we anticipate steady rather than steep growth,” said Kari Beets, Senior Manager, Healthcare Research. “The healthcare sector’s financial constraints, including tight operating margins and reimbursement pressures, will likely moderate rent increases compared to premium office submarkets experiencing a flight to quality.”

Sunbelt population growth and established healthcare brands fuel market expansion

While Sunbelt markets are seeing significant growth due to population shifts, the report details strong performance in markets like Boston and Northern New Jersey that benefit from the presence of established, growing health systems with strong brand recognition, which can support growth through fundraising and attract high-value specialties.

Markets with strong rents and occupancy are spread throughout the country, with four Sunbelt markets seeing rent growth over 3% – Miami, Orlando, Austin and Tampa. New York led all markets with new outpatient services move-ins in 2024 for both leased and owned space. Although Philadelphia led all markets in 2024 MOB net absorption, with Houston and Atlanta posting more than 400,000 square feet of net absorption each, the Norfolk/Hampton Roads, Virginia, area saw strong absorption compared to total inventory.

Medical properties attract investors and health systems with stable returns

Medical buildings continue to offer stability for investors, and health systems also see benefits to ownership. Medical outpatient transaction volume increased in 2024, bolstered by significant acquisitions in the sector.

The report also provides insights on the future perspective of the MOB market, including potential challenges and opportunities for developers, health systems, tenants and investors. Key considerations include the impact of changing healthcare delivery models, challenges posted by limited supply pipeline and the role of technology in shaping future healthcare real estate needs.

“The stability and growth potential of medical outpatient buildings continue to attract investors,” said John Chun, Senior Managing Director and Medical Properties Group Leader, Capital Markets, JLL. “With average lease escalations of 3% and terms for new leases averaging almost nine years, MOBs offer a compelling investment opportunity in today’s market.”

Future perspective

Healthcare demand remains robust due to an aging population and increased outpatient needs; however, potential challenges may impact demand for medical outpatient spaces and shake up the healthcare sector.

“Looking ahead, we anticipate continued evolution in the healthcare real estate sector,” added Carron. “Factors such as the shift to home-based care, telehealth advancements, changing healthcare policies and demographics will all play a crucial role in shaping the design and demand for medical outpatient space. Stakeholders across the industry will need to remain agile and forward-thinking to capitalize on these emerging trends.”

RangeWater Real Estate and equity partner CenterSquare Investment Management acquired an upscale residential community in the growing Frisco submarket of the Dallas-Fort Worth metro area.

The joint venture purchased Sorrel Phillips Creek Ranch located at 5050 Farm To Market Road 423 in Frisco. The acquisition is part of rental housing industry leader RangeWater’s strategy to continue meeting housing demand by purchasing communities in desirable neighborhoods across the Sun Belt. The acquisition was an off-the-market deal, and the price was not disclosed.

RangeWater is actively seeking new land sites and existing properties throughout the Dallas-Fort Worth MSA. The company currently manages more than 3,000 units across 17 properties in Texas. Sorrel is the firm’s ninth community under management in the Dallas-Fort Worth metro area.

Sorrel Phillips Creek Ranch features 352 luxury one-, two-, and three-bedroom homes, ranging from 776 to 1,476 square feet. Built in 2015, the pet-friendly apartment homes offer open floor plans complete with plank wood-style flooring, soaring 9-foot ceilings, upscale kitchens, and sophisticated crown molding.  The upscale floor plans feature walk-in closets, stainless steel appliances, granite countertops, walk-in showers, and soaking tubs. 

JPI has officially broken ground on Jefferson Morningstar, a 373-unit, four-story, garden-style multifamily community in The Colony, Texas.

This project marks JPI’s first partnership with Nomura Real Estate Development Co., Ltd., and is a significant milestone in the development of this rapidly growing area. Additionally, JPI is partnering with Yoram Avneri, the original owner of the land, to bring this exciting project to fruition. 

Jefferson Morningstar will be ideally situated near major employers in the Dallas-Fort Worth metroplex, including those in Plano and Frisco. The community will offer a variety of studio, one-, two-, and three-bedroom apartments, designed to cater to a broad spectrum of residents. With high-end finishes and modern amenities including a fitness center, dog park, co-working spaces, and a clubhouse overlooking a resort-style pool, Jefferson Morningstar promises to deliver an exceptional living experience. The development will create a vibrant live-work-play environment that balances comfort with convenience. 

The first homes at Jefferson Morningstar are expected to be available for lease in 2027.