Commercial real estate in 2026 is characterized by differentiated performance across markets and asset types. Office recovery trajectories vary meaningfully by metro, retail performance reflects format-specific resilience, and domestic migration patterns continue to influence long-term demand fundamentals.
Return to Office Patterns
Many higher-income metros continue to trail 2019 benchmarks but drive the strongest Year-over-year gains, signaling a potential inflection in office utilization trends.
Miami Continued Leading RTO in 2025; San Francisco Led the Year-over-Year Office Recovery
Major Insights:
• Sunbelt markets along with New York, NY are closest to pre-pandemic office visit levels, while many coastal gateway and tech-heavy markets trail 2019 benchmarks.
• Many of the metros still furthest below pre-pandemic levels are now posting the strongest year-over-year gains.
Key Takeaways for CRE Professionals:
• Leasing velocity may accelerate in coastal markets – particularly in high-quality assets – even if full recovery remains distant. The expansion of AI-driven firms and innovation-focused employers could support incremental demand in these ecosystems, reinforcing a bifurcation between top-tier buildings and the broader office inventory.
Median Household Income in Market Correlates With Office Recovery
Major Insights:
• Higher-income metros such as San Francisco show deeper structural gaps vs 2019, perhaps due to their higher concentration of hybrid-eligible workers – yet those same metros are driving the strongest YoY recovery in 2025.
• Accelerating growth in 2025 suggests that shifting employer policies, workplace enhancements, or broader labor dynamics may be beginning to drive increased in-office activity.
Key Takeaway for CRE Professionals:
• Office performance in higher-income markets will increasingly depend on workplace quality and policy alignment. Assets that support premium amenities, modern design, and tenants implementing clear in-office expectations are likely to influence sustained office visits and leasing velocity in these metros.
Shopping Center Patterns
Retail traffic is broadly improving across states, though performance varies by region and format.
Shopping Center Visits Increased in 2025
Major Insights:
• Retail traffic growth is broad-based, with the majority of states showing year-over-year gains in shopping center traffic in 2025.
• Still, even as many states are posting gains, pockets of softer performance remain – specifically in parts of the Southeast and Midwest.
Key Takeaway for CRE Professionals:
• Broad-based traffic gains indicate consumer demand is more durable than anticipated. In growth states, operators can shift from defensive stabilization to capturing upside – pushing rents, upgrading tenant quality, and accelerating leasing while momentum holds. In softer markets, the focus should remain on protecting traffic through strong anchors and necessity-driven tenancy.
Convenience-Based Performance Pulling Ahead
Major Insights:
• Convenience-oriented formats are leading traffic growth, with strip/convenience centers materially outperforming all other shopping center types, and neighborhood and community centers also posting gains. This reinforces the strength of proximity-driven, daily-needs retail.
• Destination retail formats, including regional malls and factory outlets, continue to lag, while super-regional malls were essentially flat. Larger-format, discretionary-driven centers are not capturing the same momentum as convenience-based formats.
Key Takeaway for CRE Professionals:
• The data suggests that consumer behavior continues to favor convenience, frequency, and necessity over destination-based shopping. Operators should lean into service-oriented and daily-needs tenancy in strip and neighborhood formats, while mall operators may need to further reposition assets toward experiential, mixed-use, or non-retail uses to stabilize traffic.
Migration Patterns
Domestic migration continues to reshape state-level demand, with gains clustering in select growth corridors.
Northern Planes, Southeast Lead State-Level Migration Growth
Major Insights:
• Domestic migration drove population gains in parts of the Southeast and Northern Plains, while several Western and Northeastern states show flat or negative migration.
• Some previously strong in-migration states in the South and West, including Texas and Utah, are showing softer movement, while other established migration leaders such as Florida and the Carolinas continue to attract net inbound residents.
Key Takeaway for CRE Professionals:
• Migration flows are shifting relative to prior years. Operators should temper growth assumptions in states where inflows are slowing and prioritize markets where inbound demand remains strong.
Florida Metros Magnet For Domestic Migration
Major Insights:
• Florida dominates metro-level migration growth, with eight of the top ten U.S. metros for net domestic migration are in Florida.
• The markets with the strongest domestic migration-driven population gains are not major gateway cities but smaller, often retirement- or lifestyle-oriented metros, suggesting that migration-driven demand is increasingly flowing to secondary markets.
Key Takeaway for CRE Professionals:
• CRE operators should prioritize expansion, leasing, and site selection in high-growth secondary metros where population inflows can directly translate into retail spending, housing absorption, and service demand.
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