Closing the Year: Data Centers and High-Quality Assets Drive Momentum
Seyfarth’s real estate team provides a bird’s-eye view of the current state of commercial real estate throughout the country—highlighting which markets and major asset types are active, slowing down, or experiencing shifts.
Seyfarth’s Take: What to Know
✔ Opportunities: Data centers remain the strongest nationwide opportunity. Industrial and multifamily offer solid upside in several key markets, while selective retail—particularly mixed-use, value-add, and high-quality corridors—shows resilience. With easing interest rates and year-end momentum, CRE stakeholders are finding a more constructive environment for getting transactions across the finish line.
✔ Challenges: Office performance remains uneven across several major markets, with elevated vacancies and slow absorption continuing to create headwinds. Broader economic uncertainty is tempering demand and slowing new development activity across certain asset classes, while local political shifts, zoning adjustments, and infrastructure constraints may further shape pipelines in 2026.
✔ Market Trend: Markets are increasingly splitting between well-located, high-quality assets that continue to draw interest and properties that need updates or repositioning, particularly in office and retail. Population growth and corporate relocations are still fueling momentum in places like Dallas, while AI-driven investment is lifting activity in tech-focused regions such as San Francisco and Boston.
Regional Rundown
“Data center projects remain a major driver in the Atlanta market, though they are now encountering stronger headwinds from neighboring communities. The retail market is mixed: investment continues in first-class and strategically located mixed-use projects, but new development is limited, and leasing activity is slightly down amid continued economic uncertainty.” Kwame Benjamin, Partner
“The Boston metropolitan area continues to be driven by the region’s strong underlying economy, leading to robust activity in multifamily and data center assets. The office sector is starting to find more solid footing with stabilization in vacancy rates and renewed interest in high-quality Class A space.” Catherine Burns, Partner and Eric Greenberg, Partner
“In Charlotte, data centers are seeing exceptionally strong demand, industrial remains a high-performing sector, and multifamily, office, and retail all continue to show steady, healthy activity.” Eric Sidman, Partner
“The Chicago market has seen increased activity with the recent decline in interest rates. Multifamily and industrial activity are up from the prior quarter, and data center demand remains strong. However, the office sector continues to face significant pressure.” Michael Merar, Partner and Tobi Pinsky, Partner
“The Dallas market remains one of the nation’s most resilient due to robust population growth, corporate relocations, and strong tenant demand. However, multifamily construction has dropped in comparison to recent years.” Amy Simpson, Partner
“In Houston, market conditions remain unchanged: data centers and industrial continue to see very high demand, multifamily and retail remain healthy, and the office sector continues to lag with limited momentum.” Peter Oxman, Partner
“Demand for data centers in the Los Angeles area remains strong, with supply struggling to keep pace. Industrial and multifamily performance is mixed, varying by asset type, location, and age. The office market remains soft, marked by persistently high vacancies and another quarter of negative net absorption. In retail, Orange County and value-add opportunities continue to outperform.” Tim Farahnik, Partner and Stacy Paek, Partner
“The New York real estate market remains stable, with continued demand for luxury multifamily, affordable and workforce housing, high-end retail, and Class A office, while lower-tier office and retail assets continue to underperform. Activity remains highly localized, and stakeholders are watching closely to see whether Mayor Mamdani’s agenda will introduce any meaningful shifts in the months ahead.” Miles Borden, Partner and Cynthia Mitchell, Partner
“The biggest story in San Francisco is the office comeback. A surge of venture capital investment in AI start-ups, coupled with renewed pro-business optimism under Mayor Daniel Lurie, has driven a significant increase in office tour activity and a corresponding rise in office rents.” Robin Freeman, Partner
“The Seattle market remains mixed: office leasing is soft and developers are cautious, but steady consumer spending and return-to-office policies are increasing foot-traffic and downtown optimism.” Jami Balint, Partner
“In the Washington, DC area, demand for Northern Virginia data center space remains exceptionally strong, though power constraints and zoning changes may limit new development or push growth into tertiary markets. Retail in prime mixed-use neighborhoods continues to perform well, and the office sector is showing early signs of recovery, with trophy assets leading performance.” James O’Brien, Partner