As macroeconomic conditions evolve and occupiers reassess long-term space needs, select asset types within commercial real estate are emerging as clear areas of focus.
Shifts in technology, demographics, supply chains, and public policy are reshaping demand patterns across sectors, creating both near-term challenges and long-term opportunities. Understanding which asset classes are positioned for resilience and growth can help occupiers make more informed real estate decisions.
Below are several asset types worth watching as these structural changes continue to unfold.
1. Data Centers:
To state the obvious, data centers are in high demand. About half of data centers are reported to be owned and operated by their users, while the other half are leased. Leased data center facilities are often developed by REITs and colocation providers for various tenants. Large hyperscale facilities (1--+ MW projects) are becoming the new standard, reflecting demand from cloud providers and AI infrastructure buildouts.
The defining constraint for data center development is access to reliable and scalable power. Available power increasingly determines where facilities can be built. Delays and shortages in power infrastructure are slowing deliveries and extending building timelines.
Key Consideration: Adaptive Re-Use - Developers are increasingly converting industrial/retail buildings into data centers to meet demand and reduce development costs.
2. Logistics:
The passage of the One Big Beautiful Bill Act (OBBBA) was designed to provide major incentives for U.S. manufacturing, encouraging domestic production and modernization. As a result, supply chains are becoming increasingly strategic to maximize profit margins and efficiently reach customers. Despite a post-boom moderation in some markets, the logistics industry remains a key driver of the industrial sector.
Key Consideration: Power Drain – An increasingly critical aspect for logistics/distribution centers is power. It’s not only data centers that require additional power. Electrification of trucks, automation equipment, robotics, cooling systems, and high-throughput logistics facilities is driving power needs faster than utilities can upgrade infrastructure.
3. Experiential Retail:
The concept of building an experience for retail users has been around for quite some time. However, a new wave of experiential retail is focusing more on utility and community, not just entertainment. Drawing customers from home is becoming challenging. Health and wellness concepts, such as med-spa hybrids, and hands-on service offerings like cooking workshops or maker spaces, provide a value-added experience.
Retailers are reducing their physical inventory and transforming underutilized spaces into on-site services. Because experiential concepts have high upfront buildout costs, landlords are offering percentage rent, partnership or performance leases, and TI-heavy deals.
Key Consideration: Brand Awareness – A physical store is becoming more of a media strategy, not just the sales strategy.
4. Medical Office / Healthcare-oriented Properties:
The real estate healthcare sector, particularly medical office buildings, has been a bright spot in the broader office market. Outpatient facilities are experiencing high and sustained demand due to healthcare utilization rising as the population ages. As healthcare shifts away from centralized care, urgent care, diagnostics, specialty clinics, and other community-based services are being offered.
The result has expanded the role of medical office space outside of traditional hospital campuses.
Medical facilities require specialized construction, causing the supply side to be constrained. The limited pipeline, combined with strong demand, supports rent growth and high occupancy, even as the overall office market struggles.
Key Consideration: Technology Simplifies Complex – Advancements in technology mean that MOBs and specialized Ambulatory Surgery Centers are increasingly handling complex procedures that once required overnight hospital stays.
5. Life Sciences/R&D:
This sector is currently experiencing short-term challenges, particularly as large pharmaceutical companies have significantly reduced their leasing activity. However, the long-term outlook for the sector remains positive, presenting opportunities for occupiers when looking at life science industry trends.
Recent federal policy changes are promoting the reshoring of biomanufacturing to the United States, which is expected to boost future demand. Additionally, an aging population will drive ongoing demand for pharmaceutical innovation and healthcare services, highlighting a sustained need for research and development (R&D) space in the long run.
As demand slows, there has been a significant decline in venture capital investment. Life sciences clusters, such as San Diego and Boston, are responding in unique ways, necessitating a nuanced approach for businesses seeking opportunities.
Key Consideration: Integration of AI and technology – The use of AI in drug discovery and clinical trials is increasing efficiency and generating demand for new types of spaces that require different infrastructure—specifically, more computational power and less physical lab space per employee.
While each CRE asset type faces its own unique dynamics, common themes are emerging across the commercial real estate landscape. Power availability, technological advancement, demographic shifts, and evolving business models are increasingly influencing where and how space is developed and utilized.
For occupiers, success will depend on aligning real estate strategy with these underlying drivers, whether that means planning for higher infrastructure demands, rethinking space efficiency, or leveraging flexibility as markets adjust.
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