CPE Executive Council: CRE Trends That Are Overhyped—or Underestimated
Discover what you should actually pay attention to in the industry.
It’s hard to know whether to jump on the bandwagon or to wait and see if something will become popular. This month, our experts share which CRE trends are worth your attention.
Prioritize Stickiness
There is a prevailing market hype that most commercial real estate ground-up development is on pause until interest rates, labor and material costs stabilize. Much of this wait-and-see narrative rests on the hope of the Federal Reserve cutting short-term rates. While several property types have experienced slowing new supply (e.g., office, multifamily and self-storage), the pause is far from universal.
In reality, the best-capitalized landlords and tenants have already moved past the shock phase of 2022–2023 triggered by the Fed’s 11 consecutive rate hikes. Today, growth is being fueled by tailwinds far more powerful than the Fed Funds Rate: U.S. domestic migration and business-friendly states with open arms. For developers, waiting for a perfect rate environment risks missing the window where asset pricing is most attractive and prime locations remain available.
We see this most directly in the essential retail sector [e.g., quick-service restaurants (QSR), convenience stores (C-Stores) and automotive services]. Expansion in the space is driven by population trends and site availability, not just the cost of debt. These recession-resistant concepts can provide durable cash flows that can outperform more high-profile, cyclical asset classes during periods of consumer spending slowdowns.
Retailers with multi-year growth plans and well-capitalized balance sheets are moving forward to capture high-visibility locations across growing markets. They recognize that losing the best corner in town to a competitor is a much greater long-term risk than financing a deal at current market rates.
While the broader market waits for the Fed to act, the essential retail sector is proving that operational necessity and population growth remain catalysts for value creation. In a bifurcated market, the winners are those who prioritize tenant stickiness and trending market demographics over the near-term direction of interest rates. —Todd Stender, Managing Director, LNL Capital
A Once-in-a-Generation Reordering
The Southeast investment thesis is still meaningfully underestimated—even after the capital rotation we’ve already seen. What gets overlooked are the structural, multi-decade tailwinds that are frankly generational.
Domestic migration into low-tax, business-friendly states like Florida, Georgia, North Carolina and Tennessee isn’t slowing. Corporate relocations, manufacturing reshoring, logistics and port-driven demand, quality-of-life draws pulling both talent and retirees from high-cost coastal markets—these forces are creating durable, diversified absorption across multifamily, industrial, retail, and emerging sectors like data centers and life sciences that the Northeast and West Coast simply can’t match anymore.
The supply wave has also done something useful: it reset valuations. Cap rates and entry points in these markets far outperform saturated gateways on a risk-adjusted basis.
This isn’t hype. It’s a once-in-a-generation reordering of U.S. economic geography—and once deliveries taper sharply through 2027, the rent and occupancy numbers on the ground will make that very clear. The Southeast investment thesis is still meaningfully underestimated—even after the capital rotation we’ve already seen. There’s too much focus on short-term noise: the 2024–2025 multifamily supply digestion, post-pandemic growth normalization. What gets overlooked are the structural, multi-decade tailwinds that are frankly generational. —Randy Blankstein, President, The Boulder Group
Interested in joining the CPE Executive Council and being featured in future articles? Email Jessica Fiur.
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