Northeast CRE Poised To Shift From Resilience To Optimism Heading Into 2026

The commercial real estate sector is approaching 2026 with more clarity and momentum than many predicted after an uncertain 2025, according to a new outlook from Cushman & Wakefield. 

Easing interest rates, renewed capital availability and a noticeable uptick in leasing activity are offering cautious optimism and beginning to reshape expectations across several major asset classes — particularly in the Northeast, where some of the country’s most visible office markets and highest barriers to new development continue to define market behavior. 

National economic fundamentals are providing an essential boost. Gross domestic product is on pace to grow an estimated 1.9% in 2025 and projected to expand by 1.7% in 2026. A key driver is accelerated investment in artificial intelligence and data infrastructure, which has become a measurable contributor to overall economic growth. While many new data center campuses are rising in lower-cost Midwest and Southern markets, the Northeast’s deep talent pools are attracting AI firms and research-and-development-heavy businesses — activity that is translating into demand for high-quality workspace in markets such as New York, Boston and Northern New Jersey.

Cushman & Wakefield Northeast Regional President Todd Schwartz said the dynamic is creating a notable shift in tenant sentiment.

“Across the Northeast, and especially in New York City, our brokers are seeing tenants make decisions with more confidence than we’ve seen in several years,” Schwartz said. “The combination of stabilized pricing, limited new supply and occupiers’ desire for modern, amenitized environments is driving renewed momentum at the top of the market.”

Northeast Office And Life Sciences: Stabilizing At Different Speeds

New York offers one of the clearest indicators of this shifting environment. Leasing improved in 2025 as tenants capitalized on steadier pricing and a historically low construction pipeline. The flight-to-quality theme held firm, with Manhattan’s top-tier product remaining exceptionally scarce — an imbalance that is expected to continue as development slows nationally and construction challenges remain pronounced across the Northeast.

“In New York, quality continues to be the winner in this office market,” Cushman & Wakefield Chairman of Global Brokerage Bruce Mosler said. “Best-in-class assets are competing from a position of strength, and with supply constraints accelerating, that advantage is only going to deepen heading into 2026.”

Meanwhile, Boston continues to move on its own trajectory. The city’s highly specialized life sciences market experienced greater-than-normal vacancy earlier in the cycle, driven in part by softer venture funding. 

“Despite the life science vacancy challenges we faced, we are starting to see demand stabilize and the last of the speculative development projects deliver,” said Connor Barnes, executive vice chairman from Cushman & Wakefield’s Boston office. “Boston remains one of the world’s most influential hubs for innovation, anchored by top-tier universities, cutting-edge pharmaceutical companies, medical institutions and research partnerships.”

Industrial: A Return To Normalizing Conditions

Elevated levels of industrial and data center demand across the Northeast continue, driven by investors and users seeking existing buildings and land opportunities.

“After several quarters of tenants recalibrating their space needs, activity has picked up dramatically, particularly since Labor Day,” said Gary Gabriel, executive vice chairman of the firm’s Metropolitan Area Capital Markets Group. “There is a sense from the investor community that a return to landlord-side leverage in lease negotiation is rapidly approaching — this will be a strong tailwind heading into 2026." 

Gerry Blinebury, executive vice chairman of Cushman & Wakefield’s Industrial Brokerage Group and partner in the firm’s Industrial Advisory Group, added that, throughout the Northeast, tenants are reexamining footprint strategies — in most cases, expanding or upgrading their facilities to optimize supply chain efficiency. 

“There is an abundance of capital allocated to the industrial asset class, and fundamentals remain solid, with vacancy in many submarkets still below historical norms,” he said. 

Data center developers have also begun influencing land competition and, in some corridors, future industrial supply.

“In the world of data centers, power limitations continue to shape development strategies,” Cushman & Wakefield Executive Vice Chairman Ethan Silverstein said. “We expect that primary markets will continue to capture a large share of this market due to access to power; however, secondary markets will see their share of growth in 2026 as the need for this asset class continues to grow throughout the Northeast.” 

Multifamily And Capital Markets: Strong Foundations, Rising Liquidity

Multifamily remains one of the region’s most durable asset classes. High mortgage rates, locked-in homeowners and limited for-sale inventory continue to push demand toward rentals. With construction starts down two-thirds from their peak nationally and the Northeast’s development barriers among the highest in the country, the region is positioned for firmer rent growth in the medium term.

But one of the most encouraging signs heading into 2026 is the steady return of liquidity. Capital markets activity strengthened meaningfully in 2025, with lenders reentering the market, institutional buyers resuming acquisitions, and price expectations finally aligning. Distress remains selective, and assets are rarely reaching the market under forced conditions — an encouraging signal for both buyers and sellers.

“Capital is flowing again, and it’s flowing into markets where investors have long-term conviction. The market today is firing on all cylinders,” said Ryan Dowd, managing director and co-head of Cushman & Wakefield’s Northeast Multifamily Advisory Group.

Vice Chairman and Co-Head of the Northeast Multifamily Advisory Group Niko Nicolaou added that the Northeast has always been defined by high barriers to entry and strong underlying demand drivers.

“As liquidity returns, that structural advantage becomes even more pronounced,” he said. 

Looking Ahead: A Region With Real Momentum

Taken together, these factors point to a Northeast commercial real estate landscape entering 2026 with real momentum. Supply is showing signs of tightening, occupiers are reengaging, and capital is returning to the markets that define the region.

“The past few years brought challenges, but they also revealed the fundamental strength of the Northeast,” Schwartz said. “As we head into 2026, nearly every indicator is moving in a more favorable direction. This is a region ready to move forward.”

This article was produced in collaboration between Cushman & Wakefield and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.