The commercial real estate (CRE) market is evolving with new opportunities that could significantly benefit investors. From tax incentives and regulatory changes to growing investment options, now is the time to explore strategies that maximize returns. Here’s what investors should be watching in 2025.
1. Energy Efficiency Tax Incentives: Bigger Deductions for Property Upgrades
Investors making energy-efficient improvements to their properties can now take advantage of the expanded Energy Efficient Commercial Buildings Tax Deduction (Section 179D). This allows deductions of up to $5 per square foot for upgrades such as:
✔️ Interior lighting improvements
✔️ High-efficiency HVAC systems
✔️ Energy-efficient building envelopes
This tax benefit not only lowers costs but also enhances the long-term value of commercial properties.
Source: IRS.gov
2. Investment Tax Credits for Renewable Energy: A Boost for Green Buildings
Sustainability is a key focus in commercial real estate, and renewable energy tax credits are making green investments more attractive. Under the Section 48 Investment Tax Credit (ITC), investors can receive a 30% tax credit for installing:
✔️ Solar panels
✔️ Geothermal heating & cooling
✔️ Other renewable energy solutions
These incentives align with the growing demand for energy-efficient buildings and sustainability-driven investments.
Source: CTILLC
3. Pro-Business Tax Reforms Could Benefit CRE Investors
Potential tax policy changes in 2025 may further boost commercial real estate by:
✔️ Lowering corporate tax rates
✔️ Providing accelerated depreciation for CRE assets
✔️ Offering favorable capital gains treatment
If implemented, these reforms could make real estate investments even more attractive by reducing tax burdens on property owners and investors.
Source: TheTaxAdvisor.com
4. Expansion of REITs: More Investment Opportunities
Recent regulatory changes have simplified the process of forming Real Estate Investment Trusts (REITs), leading to an increase in private REITs. These changes provide investors with:
✔️ Greater opportunities to diversify portfolios
✔️ More access to commercial real estate assets without direct ownership
✔️ Potential tax advantages from REIT structures
For investors looking to expand their portfolios, REITs continue to be a strong option.
Source: PWC
5. State and Local Incentives: Tax Breaks & Growth Initiatives
Many state and local governments offer tax abatements and development incentives to attract commercial investments. These incentives include:
✔️ Property tax reductions
✔️ Tax increment financing (TIF) for developments
✔️ Public infrastructure improvements in key investment zones
Such programs can significantly reduce costs for commercial real estate investors while supporting local economic development.
Source: EnergyStar.gov
Final Thoughts from The Bill Gladstone Group
Between tax incentives, energy efficiency credits, and expanding investment options, 2025 is shaping up to be a strong year for commercial real estate investors. Staying informed on these developments is essential to making strategic investment decisions.
At The Bill Gladstone Group, we work closely with investors to identify opportunities that align with their goals. If you’re looking for commercial real estate investments that take advantage of these trends, contact us today to explore the best opportunities in the market.