Real estate investment: recovery depends on transaction structuring

Consolidated figures for 2025 at least confirm a measured recovery: according to ImmoStat, volumes invested in commercial real estate in France will reach 13.7 billion euros in 2025, up 8% on 2024, a historically low year.

It should be noted that, according to a broader scope used by BNP Paribas Real Estate, the 2025 volume comes to 17.1 billion euros, which illustrates above all the sensitivity of “market” readings to the scope chosen – and, by extension, the importance of reasoning on a transaction-by-transaction basis.

However, this upturn does not reflect a return to widespread liquidity, nor an easing of market conditions – and this is undoubtedly the most structuring factor for players in the sector.

On the contrary, it reveals an environment in which the feasibility of operations now depends closely on their legal and financial structuring, far more than on macroeconomic dynamics alone.

What’s more, the recovery observed in 2025 appears deeply asymmetrical by asset class: logistics and hotels account for a significant share of core and value-add transactions, while secondary office space remains under structural pressure. This polarization reinforces the idea that the market is not “coming back”: it’s recomposing itself.

In this respect, investment flows remain highly concentrated, both geographically and qualitatively.

Île-de-France will account for €8.4 billion of total investment in 2025 (out of a total of €13.7 billion), i.e. around 61% of volumes, according to ImmoStat figures – and a marked year-on-year increase.

This concentration illustrates a reality that is well known to practitioners: investors are no longer looking for real estate exposure as such, but for legally controllable assets that are compatible with debt requirements and with regulatory constraints set to tighten in the medium term.

Analyses published in 2025 by CBRE and JLL confirm this polarization: relative compression of prime rates on secured assets, persistent discounts on obsolete buildings, and increasing differentiation linked to environmental performance.

In this context, the question of financing unsurprisingly plays a central role.

The gradual return of lenders is accompanied by a structural tightening of conditions: more stringent requirements on cash-flow stability, greater attention paid to residual term and flexibility of leases, systematic integration of capex linked to environmental obligations, and stricter supervision of financial covenants.

At the end of November 2025, the Banque de France reports an average cost of new bank loans to non-financial companies of around 3.46%, while “real estate” loans (by object) are significantly higher in its series.

In addition to the nominal cost of debt, the increased selectivity of banks with regard to sponsor profiles and “transition risk” assets is a decisive factor. At the same time, the rise of private debt funds – regularly highlighted by Cushman & Wakefield – is introducing more flexible unitranche or whole loan structures, but at a higher price, making intercreditor articulation and financial governance more complex.

From now on, the structuring of transactions must take into account, from the outset, the link between SPA and financing documentation, particularly with regard to change-of-control clauses, cure mechanisms and refinancing assumptions.

In this respect, the prospect of a 2026-2028 refinancing wall – on debt contracted between 2018 and 2021 in an environment of historically low rates – is a central parameter. The ability to renegotiate, recapitalize or restructure becomes a legal issue as strategic as the acquisition itself.

At the transactional level, the sophistication of SPAs has become a determining factor in their success. Successful deals are frequently those that go beyond a “dry” price logic to incorporate risk-sharing mechanisms: earn-outs conditional on future performance, vendor loans designed to absorb a valuation gap, guarantees targeted at identified risks (urban planning, environment, rental disputes), or structured recourse to W&I policies tailored to specific real estate features.

These tools, which used to be peripheral, now constitute a quasi-standard contractual grammar for value-add or opportunistic transactions.

Structuring thus becomes a strategic arbitration tool: share deal vs. asset deal, club deal vs. single investor, refinancing vs. recapitalization, asset carve-out vs. global disposal. The law no longer accompanies economic decisions – it conditions their architecture.

Furthermore, the analysis of commercial leases is an integral part of this M&A approach. In a market where value creation is based above all on securing income, rental documentation has become (or re-emerged as) a central element of legal underwriting. Indexation clauses, termination options, review mechanisms, rental guarantees and the respective obligations of lessor and lessee have a direct impact on the asset’s ability to support a debt and, by extension, on its valuation.

The latest ImmoStat/CBRE indicators confirm that the Île-de-France office rental market is still on hold: take-up in 2025 will be 1,638,100 sq.m (-9% year-on-year), with immediate supply of 6,247,000 sq.m by the end of 2025 (+11% year-on-year).

In this context, the contractual treatment of rental risk mechanically becomes more “price-sensitive”, but also more “debt-sensitive”: the firm residual term and the quality of the lessee directly influence the sustainability of the leverage.

The ESG dimension is now structurally added to these challenges. Obligations arising from the French decree on the service sector, energy performance trajectories and future work commitments are increasingly integrated into transaction documentation, not simply as compliance issues, but as factors directly influencing price, debt and post-closing commitments.

Specific declarations, ESG covenants, price adjustments or escrow mechanisms reflect this move towards a more forward-looking legal approach, geared towards the future performance of the asset.

Recent studies by Savills and PwC emphasize that energy performance is now an explicit factor in value differentiation, with a risk of accelerated obsolescence for assets that do not meet the expected regulatory and financial standards.

The upturn observed in 2025 does not therefore mark a return to the pre-2022 market.

It marks the emergence of a cycle in which liquidity depends on the quality of legal structuring, risk anticipation and the – sometimes delicate – alignment between investors, financiers and advisors.

As a further illustration, at the beginning of 2026, BNP Paribas Real Estate expects Paris CBD prime office yields to be “slightly above 4%”, and anticipates investment volume in 2026 to consolidate at around €17-18 billion (before more dynamic growth in 2027-2028), confirming a gradual, but not “automatic”, recovery.

In this context, the law is no longer a simple security tool, but a central lever for execution, arbitration and value creation throughout the entire holding cycle – acquisition, financing, restructuring and exit.