Brookfield Asset Management is optimistic about its real estate outlook in 2025 as improving liquidity and robust asset demand raise expectations for an active year.
The firm’s Q4 earnings call highlighted a 4 per cent growth in same-store net operating income within its core real estate portfolio, signalling continued strength in operational performance. Executives noted that this positive trajectory is likely to persist, driven by favourable market conditions for high-quality assets.
Financing activity and positive market dynamics
Brookfield’s financing activity underscores the scale of its real estate operations. In the past year, the company facilitated approximately $40 billion in debt financing across 182 global investments, including over $12 billion tied to its office portfolio. This extensive financing reflects increasing confidence in real estate markets, especially for top-tier properties.
“Liquidity is coming back to real estate markets around the world, particularly for the high-quality portfolio of assets that we own,” emphasized Nicholas Goodman, president & chief financial officer of Brookfield.
Several macroeconomic factors are contributing to the market’s resurgence. Fundamentals across real estate sectors are strengthening, while the cost of capital is compressing, with Brookfield observing greater capital availability and improved financing conditions globally.
And this positivity is shared by others, with JLL branding its Global Real Estate Outlook 2025 the “most optimistic outlook since February 2022” as the majority of respondents to JLL's Global real estate sentiment survey expect further improvements in the coming months.
Strong demand
This positive backdrop is already translating into asset sales across multiple sectors and geographies. Brookfield anticipates this trend will accelerate, particularly in the United States, as capital markets continue to recover and operational performance remains robust.
“We’re seeing activity on a global scale. We’ve been selling assets in different sectors and different markets around the world. And I expect that to continue and specifically in the US as we see the capital markets continue to improve, the operating performance is incredibly strong,” Goodman adds.
Brookfield’s plans for asset sales will span both its fund-held properties and those directly held on its balance sheet. The exact balance between these two categories will evolve throughout the year, but management remains confident that 2025 will be "an active year" for portfolio activity.
Renaissance but attention to detail crucial
For investors, Brookfield’s outlook serves as a bellwether for the broader real estate market. After several years of uncertainty, the firm’s expectation of increased liquidity and sustained asset demand suggests that the real estate sector may be entering a new phase of growth and stability.
Goodman says “Given the positive market dynamics for high-quality assets, we expect earnings and valuations from our real estate business to continue to strengthen in the coming years.”
However, JLL warns that the optimism doesn’t mean that 2025 will be an easy year due to an “unsettling” level of uncertainty.
“Economic, regulatory, fiscal and trade policies will continue to change and take shape. Interest rates in most markets will proceed on their downward trajectory but expectations for the speed and magnitude of change have proven highly dynamic and we expect to see signals of continued volatility. Events can supersede plans at any point and alter rate-setters' expected decisions. And this is to say nothing of the ongoing and potential geopolitical conflicts around the world.”
While the consensus is that opportunities will be plentiful in the coming year, in order to thrive, stakeholders and interested participants will need to pay close attention to the details, nuances at the market and asset in addition to the secular trends as success hinges on picking the right real estate.