US Commercial Real Estate: Energy Resilience Now Key Factor Driving Investment and Leasing Decisions

March 2, 2026: Energy resilience has become a defining factor in U.S. commercial real estate as power constraints and infrastructure capacity increasingly influence investment decisions and property valuations across multiple sectors, according to recent industry updates .

Energy Infrastructure as a Critical Factor

The availability of power has emerged as a top-tier issue with the explosive growth of artificial intelligence data centers and development occurring generally across regions . Power is now a "big, big, big conversation" in commercial real estate, with manufacturers requiring massive electrical capacity and power companies demanding proof of need before committing infrastructure—creating a "chicken and egg" dilemma for speculative development .

Data center demand remains exceptionally strong, with 2026 leasing activity expected to reach an all-time high. However, supply growth is increasingly constrained by longer power delivery timelines. Development is concentrating in markets with reliable energy access and less regulation of electricity production, particularly along Interstate 20 across the Sun Belt .

Power shortages and supply bottlenecks are limiting expansion despite surging demand from rapid growth in artificial intelligence and cloud computing. With national vacancy below 2% and most facilities pre-leased before completion, constrained capacity is keeping rents elevated and development competitive .

Investment Activity Outlook

Despite broader economic challenges with U.S. GDP growth expected to slow to 2.0% in 2026, commercial real estate investment activity is projected to increase by 16% to $562 billion—nearly matching the pre-pandemic annual average . Total returns will be income-driven, making asset selection and management key drivers for performance .

Cap rates for most property types are expected to compress by 5 to 15 basis points, with good-quality assets seeing greater compression . Investor demand remains strong, with CBRE executing the most confidentiality agreements with prospective property buyers since 2022, and sellers becoming more realistic on pricing .

Commercial real estate leasing activity will continue to recover from its 2024 low, though the underlying performance and timing of recovery varies significantly across sectors, asset types, and markets .

Sector-Specific Dynamics

Industrial Sector: Industrial properties continue working through excess supply that materialized following the pandemic-era construction boom, though the sector remains a preferred property type for investors . However, industrial momentum has softened due to trade policy uncertainty following the Supreme Court's ruling limiting presidential tariff authority .

The ruling likely will reduce trade policy volatility and bolster the USMCA, supporting both import activity and domestic manufacturing investment. Coastal gateway markets and industrial outdoor storage assets are positioned to benefit the most . Overall industrial leasing activity is expected to increase by at least 5% this year .

Office Sector: The office market continues to recover, with strong investment volume growth from a relatively low base. Performance varies greatly between newer prime and older secondary space, with scarcity of available prime space expected by year-end 2026 . Spillover demand to the next tier of space will likely increase in early-recovery office markets . Lagging office markets including Chicago and Los Angeles are bottoming out, with Boston, Seattle, and Denver expected to follow by year-end .

Retail Sector: Retail continues to show strength across the board with healthy fundamentals amid little new supply. Risk-adjusted returns look especially attractive in well-located grocery-anchored and open-air centers . Demand is expected to be driven by expanding grocery, discount, and services retailers that rely on physical locations to reach consumers .

Multifamily Sector: The multifamily sector is expected to see positive net demand throughout 2026. However, substantial newly delivered apartment units remain unleased in many markets, particularly in the Sun Belt and Midwest regions, making tenant retention a top priority .

Trade Policy Impact

The Supreme Court's ruling that limits presidential tariff authority will likely reduce trade policy volatility and bolster existing trade agreements—especially the USMCA, keeping Mexico as a top trade partner . U.S. markets with direct access to and from Mexico will continue to prosper, with improved fundamentals along both sides of the border .

However, rapidly shifting trade policy and the constant threat of tariffs continue to create uncertainty. The Supreme Court's decision striking down many "Liberation Day" tariffs could prove consequential for port markets and the larger industrial real estate market . The tariff back-and-forth continues to send ripples through the supply and logistics sector, which relies on stability and certainty to thrive .

Long-Term Outlook

The balance of real estate risks and opportunities is shifting from elevated macro policy uncertainty to a landscape increasingly defined by rising geopolitical risk . While trade policy uncertainty has eased somewhat, rising tensions and ongoing conflicts in different parts of the world pose significant spillover risks .

Despite these challenges, the industrial sector is being reshaped by supply chain realignment, including tariff disruptions, influencing preferred markets and asset types . Modern assets in key metros with population growth and transportation hubs will outperform, and the renegotiation of the USMCA should result in intriguing investment opportunities .