Construction and real estate industry outlook
Key takeaways
What is the construction and real estate industry outlook?
RSM’s construction and real estate industry outlook discusses how limited construction and labor shortages are tightening supply across the senior living facilities market. In the data center sector, designers are developing projects around megawatts, cooling density and utility timelines. In the office market, leasing is leveling off, but access to capital now separates winners from stalled assets.
Construction and real estate industry trend #1: Data centers enter a power constrained era for real estate developers
The data center sector has entered a defining moment marked by unprecedented demand and constrained power availability. Artificial intelligence, cloud expansion and enterprise digital transformation are accelerating at a pace that’s challenging the limits of existing infrastructure. As a result, the limiting factor is no longer capital or land—it’s power.
Read more about the challenges and opportunities facing data centers
Construction and real estate industry trend #2: Senior living demand rebounds as supply constraints reshape the market
The United States is entering a period of accelerated senior housing demand growth as the 80-and-over population expands sharply. Absorption is rising, occupancy has returned to prepandemic levels, and operators are seeing more tours of facilities and leasing activity.
Construction and real estate industry trend #3: Office market stabilizes, but capital constraints reshape recovery
Office market fundamentals appear to be stabilizing, as vacancy rates have begun to level off and leasing activity for higher-quality buildings has improved. However, this operational stabilization is occurring alongside financial stress for many property owners, driven by large volumes of upcoming loan maturities, refinancing challenges and negative equity positions.
Read more about the challenges and opportunities for the office market
Construction and real estate industry trend #4: Affordability is key for multifamily and single-family home construction
The push for more attainable housing will continue to reshape the market for years to come. We expect 2026 will be a turning point for multifamily housing, with stronger rental growth and declining vacancy rates. Developers should make the most of this opportunity by embracing innovation and appealing to a customer base looking to enter the market.
Read more about the challenges and opportunities facing buyers and developers
Construction and real estate industry trend #5: Build-to-rent is reshaping U.S. housing
Housing preferences across the U.S. continue to change, but substantial recent bets by institutions show the build-to-rent asset class is here to stay. A new demographic of renters-by-choice is increasingly choosing these communities, which fill a void in the market. Developers should make the most of this opportunity by investing in strategic geographic markets and ensuring consumers’ evolving demands are satisfied.
Read more about the opportunities for renters, developers and investors
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