Spring 2025 Real Estate Matters

Thank you to everyone who attended this year’s Lancaster Commercial and Industrial Real Estate (C&I)Council meeting. For those who were unable to make it or are interested in learning more about this year’s presentation, please visit https://bit.ly/42tZq4b to download the slides, or visit highrealestategroup.com and scroll through the “News” section halfway down the home page.

In this issue of Real Estate Matters, we cover the salient parts of my remarks at the meeting and those of our asset class leaders. As 2025 progresses, I am
generally optimistic about the outlook for the real estate market, driven by positive economic indicators and strategic opportunities across various asset classes. The economy continues to show resilience, with real GDP growth outperforming forecasts and a declining probability of recession. Inflation remains a concern,  particularly in housing costs, but the overall economic environment is conducive to growth and stability.

The sentiment for acquisition remains strong, particularly in the industrial and multi-family sectors. The office sector is showing some early signs of recovery,
which gives us optimism about the continued positive movement as more people return to the office. Cap rates are stabilizing, and underwriting criteria are adapting to market conditions, ensuring sustainable investment opportunities. Lancaster’s real estate market continues to outperform national trends. Our local
office market remains resilient, with vacancy rates significantly lower than national averages. While the industrial and multi-family sectors are experiencing record levels of development, we anticipate demand will remain strong, absorbing the additional space as it becomes available.

The construction industry faces challenges with material costs and labor shortages, but we are confident in our ability to navigate these headwinds. By prioritizing
domestic sourcing and diversifying supply chains, we are well-positioned to maintain our momentum and meet the growing demand for new developments. Overall, the real estate outlook for 2025 is promising. We are committed to leveraging these opportunities to drive growth and deliver value to our stakeholders. Thank you for your continued support and partnership.

Mark Fitzgerald
President and Chief Operating Officer
High Real Estate Group LLC