By DON FENLEY

After the surge in activity that defined 2024, the Tri-Cities commercial real estate market entered 2025 in a noticeably different posture. Transaction volume cooled, but the slowdown was not symptomatic of market stress. Instead, 2025 revealed a CRE landscape that is more selective, more evenly paced, and structurally healthier.

Total commercial transactions declined from 1,715 in 2024 to 1,538 in 2025, a pullback of just over 10%.

One of the defining shifts in 2025 was timing. Where 2024 experienced sharp surges – most notably during the spring and early summer – 2025 activity was spread more evenly across the calendar. Monthly totals avoided the dramatic peaks and valleys.

This smoothing effect points to a market increasingly driven by deliberate decision-making, rather than urgency.

Land transactions continued to dominate commercial activity, accounting for well over four-fifths of all CRE deals in both years.

Industrial transactions increased in 2025, albeit from a modest base. The gains were incremental rather than explosive, consistent with the Tri-Cities’ profile of small-scale manufacturing, warehousing, and owner-user facilities.

Retail-commercial properties also showed resilience. Transaction counts edged higher and, more importantly, remained consistent throughout the year, reinforcing the durability of neighborhood-serving retail and service-oriented space.

Office activity declined year-over-year, but the category never disappeared. Closings occurred in nearly every month, underscoring a key reality: the local office market is not collapsing – it’s resizing.

Smaller footprints, owner-occupied transactions, and adaptive reuse are increasingly shaping this segment, signaling sustainable stabilization at a lower equilibrium.

While total multifamily deal counts remain modest relative to land, the growth in this combined category reflects a structural pivot:

• Smaller projects over institutional-scale deals
• Flexibility in design and use
• Incremental density rather than large-block development

This aligns with broader affordability pressures and evolving housing demand across the region.

The Tri-Cities commercial real estate market exited 2025 in a stronger position than raw transaction counts imply. Activity cooled, but the structure improved. Deals became more purposeful, volatility declined, and capital allocation grew more selective.

As the region moves into 2026, the foundation is set for measured growth rather than excess. Success will favor investors, developers, and brokers who understand not just how many deals are happening, but where, why, and under what structural conditions.

Categories: REAL ESTATE