Real Estate: Market Pulse (September 2026)

Growth Concentrates in Data Centers and Industrial While Office Recovery Continues

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: AI continues to drive commercial real estate demand, particularly in Boston and San Francisco, where technology investment is supporting data center, multifamily, and office activity. Texas remains a standout, fueled by population growth, corporate relocations, and strong demand for new data center development. Industrial fundamentals also remain healthy across many major markets, including Dallas, Atlanta, Chicago, Houston, Los Angeles, and New York.
✔ Challenges: Infrastructure remains a key constraint on growth, with power availability and utility capacity increasingly influencing where new development can occur. Localized headwinds also persist, including softer office conditions in New York and Chicago, federal workforce reductions impacting office and multifamily demand in Washington, DC, and a pause in Charlotte's data center development pipeline.
✔ Market Trend: AI investment is boosting demand in technology-focused markets, while population growth and corporate migration continue to support Sun Belt markets such as Dallas and Charlotte. At the same time, investors are placing greater emphasis on market-specific fundamentals, creating a landscape where data centers and industrial remain dominant, office recovery varies significantly by region and asset class, and opportunities are concentrated in markets with strong long-term demand drivers and infrastructure capacity.

Regional Rundown

"In Atlanta, transaction momentum is evident across asset classes. Large-scale industrial properties continue to lead the charge as availability tightens and the development pipeline improves, while demand for both new and existing data center projects remains strong." Kwame Benjamin, Partner
 
"AI and technology companies continue to drive momentum across the Boston commercial real estate market, particularly in the data center and industrial sectors. Job growth in the AI industry is also supporting multifamily demand and contributing to a gradual recovery in the office market." Catherine Agnello, Partner and Eric Greenberg, Partner

"The Charlotte market continues to experience steady growth across most asset classes. While data center development activity remains on pause pending the current review period, industrial, multifamily, office, and retail sectors continue to show stable performance and positive momentum." Eric Sidman, Partner

"The Chicago commercial real estate market remains stable, with data centers and industrial continuing to lead demand. Multifamily and retail fundamentals remain relatively steady, while the office sector continues to face comparatively weaker conditions." Michael Merar, Partner and Tobi Pinsky, Partner

"Dallas remains one of the most active markets in the US. Population growth, corporate relocations, and economic diversification are leading factors. Currently, industrial and retail are carrying the market." Amy Simpson, Partner

"The Houston commercial real estate market remains active, with industrial and retail fundamentals continuing to perform well. Multifamily construction has moderated, while the office sector is showing early signs of stabilization. Across Texas, the data center sector continues to experience strong demand for new development as stakeholders navigate evolving power and infrastructure considerations." Peter Oxman, Partner

"In Los Angeles, data center demand remains strong, with developers continuing to navigate evolving power availability and development considerations. Industrial fundamentals remain healthy, with rental rate growth and positive absorption expected to support continued demand. Multifamily performance remains steady, with moderate rent growth and vacancy trends. Office fundamentals continue to improve gradually, though a full recovery remains some time away, while the retail sector remains stable with moderate rent growth and relatively consistent vacancy levels." Tim Farahnik, Partner and Stacy Paek, Partner

"Market conditions in New York remain largely unchanged heading into the fall. Multifamily and industrial continue to generate strong activity, while data centers and retail remain stable, and the office sector continues to face comparatively softer conditions." Miles Borden, Partner and Cynthia Mitchell, Partner

"The San Francisco commercial real estate market continues to show steady improvement across several asset classes, including office, supported by ongoing AI-driven growth." Robin Freeman, Partner

"In Seattle, data center demand remains strong amid new development constraints. Industrial market conditions have stabilized despite increased vacancy driven by new supply. Multifamily fundamentals have improved, with vacancy declining year-over-year. Office vacancy remains elevated." Jami Balint, Partner

"The Washington, DC commercial real estate market continues to be shaped by historically strong demand for data centers in Northern Virginia, which shows no signs of abating. Although industrial and retail remain stable, reductions in the federal workforce continue to impact demand for multifamily and office properties, though the office sector is showing signs of stabilizing after recent years of contraction. Trophy office assets remain in demand." James O’Brien, Partner