2026 Commercial Real Estate Market Update

By Lindsay Sherwood Fouse-Hopkins

In our 2025 outlook, we identified power availability and interconnection delays as emerging constraints on data center development. We also noted a growing tension at the state and local level, as jurisdictions sought to balance economic development – often tied to redevelopment of brownfield or underutilized sites – against infrastructure strain and community concerns.

In 2026, those dynamics have intensified and, in many markets, become the defining factor in whether projects move forward at all. At the same time, the rapid acceleration of artificial intelligence (AI) workloads is fundamentally reshaping electricity demand curves, exposing the limits of legacy grid infrastructure and catalyzing a structural shift toward behind-the-meter (“BTM”) power solutions.

By Thomas Ball and Chad Poznansky

In the post-pandemic world, office leasing has continued to grow year over year, but the strength of the growth is inconsistent across the asset class. Notably, Class A, downtown office space, has rebounded while the market for suburban office space has not seen the same success.

By Kristen Erickson and Jacques Moye

As debt, equity and other funding sources for real estate developments dwindle and become scarce and competitive, developers and real estate owners are becoming more creative in their project financing strategies and mix.

By Maram Salaheldin and Lindsay Sherwood Fouse-Hopkins

While economic and policy uncertainty may persist, environmental, social, and governance (ESG) and sustainability considerations have become fundamental components of asset resilience and long-term valuation, particularly as the commercial real estate (CRE) industry faces rising insurance costs and the physical risks of climate change.

By Drew Melville

States and localities across the US are enacting legislation to promote Transit Oriented Development (TOD) as communities continue to focus on addressing severe affordable housing shortages while promoting walkable, dense, mixed income infill development with easy access to transit; and as the value of TOD communities continues to be proven through increases in local tax bases and in surrounding property values. This article briefly discusses recent developments in TOD legislation in Massachusetts and Florida, where the author is licensed and where he represents developers (TOD and otherwise) in land use, development and transactional real estate matters.

By Joshua Farber and Jason Schwent

Although the COVID-19 pandemic has ebbed from the daily lives of workers, its impact on hybrid work continues. While no consensus has emerged, the hybrid work model, which requires splitting the work week between going into the office and working from home, has grown in popularity.