We brought Juan Arias from CoStar and Anthony Graziano from Integra Realty Resources back to break down what actually happened in commercial real estate through Q4 and where things are heading. We cover industrial, multifamily, office, data centers and the macro trends you need to understand right now. Here’s what stood out.
The mid-size product (100,000–500,000 sq ft) is still struggling. Vacancies are climbing, older inventory is seeing net move-outs, and some of that is the lingering freight recession working its way through the system. The coastal West Coast markets — Inland Empire being the prime example — continue to underperform, while Texas (Dallas and Houston) is absorbing most of the national demand.
Data center construction spend is projected to surpass warehouse construction in 2026. That’s not a prediction — the two lines had nearly converged by end of 2025.
Over 200 data centers are currently under construction nationally. The real bottleneck isn’t capital. It’s power. Sites with immediate grid access command huge land premiums. Projects without it may wait 5–7 years to break ground. Virginia now dedicates over 22% of its entire electricity generation to data centers.
Copper is at the center of the buildout. Everything needed to expand the grid — data centers, EV infrastructure, advanced manufacturing — runs on copper. Stockpiles have hit levels not seen since the early 2000s as companies race to get ahead of anticipated tariffs. Chile and Peru supply most of the world’s copper, and how trade policy evolves with those countries is a major variable to watch.
The luxury condo market above $1,000/sq ft is holding up. About 50% of buyers are now domestic — a shift from the historical reliance on South American capital — and that’s providing some insulation from international headwinds like a strong dollar.
But the broader market is under real pressure. International migration — the primary driver of South Florida’s labor force and apartment demand — has dropped sharply. Domestic in-migration from the pandemic has plateaued. Natural population growth is essentially flat. The result is rising multifamily vacancies, slowing retail, and negative industrial net absorption in South Florida over the past 12 months.
Workforce housing remains nearly impossible to develop at scale. The cost-to-rent relationship is out of balance, and until that changes or migration returns, new supply won’t pencil.
Class A office in major metros is recovering. Net leasing is up nationally, New York is leading, and return-to-office is gaining real momentum as companies hit the wall on remote culture and training. On the distressed side, product is trading at $30–$60/sq ft in some markets — a significant opportunity for investors willing to hold through the cycle.
The era of underwriting cheap debt and banking on cap rate compression is over. Investors are getting fundamentals-driven again. The equity side wants real yield on cost and realistic rent growth assumptions. That’s drawing capital toward stable Midwest and Northeast plays, while Southeast opportunities are increasingly opportunistic — distressed acquisitions only, not core buys.
As Anthony put it: you’re not going to find a stabilized Southeast multifamily deal worth doing right now. But you might find something distressed that works if you’re patient and buy the basis right.
Watch the full episode for the complete breakdown — including immigration policy and its direct impact on real estate demand, the small modular nuclear reactor story, and a candid conversation on the long-term demographic picture for the US.