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A steady period of oversupply has led to lower absorption rates, and future multifamily development is slowing down in response. Bright spots are emerging in select cities.

Resilient demand, new supply contraction and abundant acquisition capital are bolstering forecasts for modest growth in the multifamily sector for 2026, despite economic uncertainties, according to the Winter 2026 Yardi Matrix U.S. Multifamily Outlook report. Yardi forecasts a 1.2% increase in advertised rent growth nationally for 2026 and 2.0% for 2027, though projections vary by region. Rent growth should strengthen beginning in 2028.

Development activity is slowing nationwide. Yardi projects completions will drop 24% in 2026 to 450,000 deliveries, down from the 595,000 expected for 2025. Further slowing is projected in 2027 to 416,000, before increasing slightly to 421,000 in 2028.

Absorption Slowdown

Course correction is occurring after a period of oversupply. In its January 2026 Commercial Real Estate Insights Report, the National Association of REALTORS® reports absorption of 437,897 units in December 2025, a 19% decline from a year earlier. New deliveries of multifamily units dropped 26% over this same period and continued to exceed absorption rates. However, several regional bright spots appear.

New York City topped NAR’s list of markets with the strongest 12-month absorption at 27,704, followed by Dallas-Fort Worth (25,059), Austin, Texas (19,665) and Atlanta (19,565). Rounding out the top ten were Phoenix; Charlotte, NC; Seattle; Nashville, Tenn.; Denver and Houston.

Market conditions were mixed across classes, with Class A showing stable but soft conditions, marked by a 0.1% rent decline, while vacancies held at 10.2%, NAR data shows. In the mid-tier segment, a rise in vacancies to 9.8% and a 0.1% drop in rent growth signaled a cooling momentum for Class B. Class C continues to outperform rent growth (up 1.1%) despite ongoing tenant turnover, with vacancies the lowest among the classes at 6.3%.

Rent Pressures

The volume of new deliveries has put pressure on rents, especially in the Sun Belt, where, since January 2023, Yardi reports the largest rent declines in recent years have been in Austin (-14.2%) and Phoenix (-9%). Alternatively, markets with limited new supply saw rent growth during the same period, with New York City (13.0%), Chicago (10.2%) and Kansas City (9.3%) topping its list.

Yardi expects regional trends to continue in 2026, with limited new construction and healthy absorption supporting rent growth in coastal and Midwest markets, led by Boston and Washington, D.C. (both at 2.1%), followed by Indianapolis and Kansas City (both at 1.9%) and Columbus and Detroit (both at 1.7%).

Sun Belt cities will continue to experience weak rent growth as they work through substantial lease-up pipelines, despite solid demand, Yardi reports.

Momentum in Capital Markets

After nearly two years of weak capital markets, equity and debt volumes rose throughout 2025 (up 7.2% in November compared with the previous year), Yardi’s report says, and the momentum will likely continue, given declining interest rates, abundant acquisition capital and lenders eager to put money into the market.

Yet economic uncertainty and the widening gap in consumer wealth distribution between the top and bottom halves will continue to put pressure on the multifamily sector, which is sensitive to job growth and consumer confidence. Still, the overall stability of the multifamily sector is a positive counter during times of uncertainty.

Source: “Multifamily Sector Positioned for Modest Growth in 2026”

The hundred-billion-dollar race to build artificial-intelligence data centers as fast as possible has found a new target: bitcoin miners.

Across the country, so-called “mega-scalers” looking to build data centers in the gigawatt range have unlocked hundreds of billions of dollars to support an unprecedented effort to increase both the intelligence of AI products and deploy them widely. That means companies such as Microsoft, Google, Oracle, OpenAI and Meta are pouring money into projects across the country.

But the bottlenecks are growing, with mounting local resistance to projects, concerns over water and electricity usage, and yearlong delays to connect to the wider grid for the massive power needed to operate.

These companies, designed with the computer power needed to produce new bitcoin, already have a lot of what the hyper-scalers need: Massive, secured electrical power capacity in areas with low rates, industrial-level cooling systems, large campuses and high-bandwidth networking potential.

That’s not to say it’s an easy conversion, as bitcoin mines use different technology than AI data centers. AI data centers also need multiple levels of redundancy and often denser cooling and power requirements. The transformation can cost tens of millions of dollars or more, experts say, but it offers the most attractive quality for data center developers — speed.

“Standing up new substations and transmission lines can take years, and interconnection queues are only getting longer,” said Wayne Highfield, director of operations at Megawatt, a large-scale mining company based in Indiana. “Partnering with existing mining operators can shorten timelines, put available energy to work immediately, and create more pathways to get projects online.”

AI shift fueled by demand

The desire for speed has already begun playing out across the country.

Bitcoin miner Bitfarms Ltd. announced in November that it was converting its 18-megawatt bitcoin mining facility in Washington state to support AI workloads after signing a $128 million agreement with what it called a “large, publicly traded” provider of data centers.

Ben Gagnon, CEO of Bitfarms, said at the time that there were compelling reasons for the company to pursue a “GPU-as-a-service” model and ultimately forgo mining.

“Despite being less than 1% of our total developable portfolio, we believe that the conversion of just our Washington site to GPU-as-a-Service could potentially produce more net operating income than we have ever generated with Bitcoin mining,” he said, adding it could provide the company with a strong cashflow foundation.

Bitfarms is not the only miner to cash in on the AI tsunami.

CleanSpark Inc., which bills itself as “America’s bitcoin miner,” appointed a senior executive in charge of data centers in October as part of its effort to expand beyond bitcoin.

Former or current bitcoin miners such as TeraWulf, Soluna Holdings, Hut 8 and others have inked deals over the last year to convert existing facilities, build new AI data centers on existing sites or co-locate AI with mining operations.

Investment firm VanEck, which also offers bitcoin and related investments, said in a January report that mining activity has dropped by about 2% and the overall “hash rate” dropped 6%, a decline it attributed to miners powering down rigs to instead service demand for AI data centers.

“We expect AI data center demand to persist over the coming years, with a (+24%) CAGR through 2030, and expect bitcoin miners to increasingly devote power resources to servicing the buildout of artificial intelligence,” the company said in a blog post.

Digital asset investment manager CoinShares said the pivot to AI data centers is attractive because it offers more stable, predictable revenue — and at a much higher margin. How much? About three times the return of bitcoin on a per-megawatt basis.

By October, bitcoin firms announced about $65 billion worth of contracts with AI firms or data center operators, CoinShares reported. Of the six publicly-traded companies that have announced AI projects so far, CoinShares anticipates that bitcoin mining revenues will decline from about 85% in 2025 to under 20% by the end of 2026.

Morgan Stanley said in a September report that bitcoin mining companies have about 6.3 gigawatts of operational, large sites and another 2.5 gigawatts under construction, making them the “fastest way to obtain electricity with the lowest execution risk” for AI companies. Morgan Stanley said if mining sites were transformed into data centers, it would create about $5 to $8 of equity value per watt, far more than bitcoin.

Private consulting firm WiseGuy Reports expects to see more of the bitcoin-to-AI pivot — especially among the largest, publicly-traded firms — as more value is being placed on the number of megawatts these firms control, opposed to the power they can bring to bitcoin mining operations.

“As of early 2026, the trend has moved beyond experimentation into a full-scale land grab for power,” the report said. “Hyperscalers are so desperate for capacity that they are signing multi-billion-dollar pre-lease agreements before the retrofits are even complete.”

Another pressure on bitcoin miners is the price of bitcoin, which has steadily dropped from an October high of around $124,000 per bitcoin to around $70,000 as of publication time — putting it below the cost to mine it.

Data center conversion potential

How many potential sites across the country are capable of being converted to AI? There is no exact number.

The Energy Information Administration estimated about 137 bitcoin mines were operational across the country in 2023 — about 2.3% of the total American energy consumption. However, not every site will be suited to convert to AI demand, Wise Guy Reports said, and not every bitcoin miner will have the resources to convert their operations over to AI operations.

But for the companies that show they have the land, power and resources, there will be no shortage of interested parties willing to fund the buildout.

“This ‘build-to-suit’ demand creates a ‘de-risked’ environment for miners; if they can prove they have the power and the ability to build a Tier 3 shell, the tenants are already waiting at the door with open checkbooks,” the report said.

The rapid rise of generative AI platforms such as OpenAI’s ChatGPT, Anthropic’s Claude, Google’s Gemini and others has meant hundreds of millions of users per day are generating text and images. When it comes to widespread adoption, though, cracks have started to appear.

Small businesses collectively are not racing to adopt AI tools, with overall adoption having slowed in some cases and having stopped in others, according to a fall 2025 Census Bureau Business Trends and Outlook Survey, which is conducted once every two weeks surveying 200,000 small businesses. The percentage of small-business owners who report using AI to produce goods or services has grown since the survey launched in 2023, from an initial 3.7% to 9.7% in September, according to the survey, first reported by the Apollo Academy. The companies that are adopting the technology vary substantially by size, though.

Source: “Data center developers are zeroing in on a new target“

Los Alamos County is gearing up to renovate its county arena to address accessibility issues, seating capacity and building code requirements.

The Los Alamos County Council on Feb. 10 unanimously approved a task order with All-Rite Construction Inc. for a $2.8 million renovation of Los Alamos Brewer Arena at 4 N. Mesa Road.

A Wilson and Company Inc. 2024 assessment found the 20-year-old arena had structural damage on the pavilion, grandstand and announcer’s box, and its parking areas, pedestrian circulation routes and restroom facilities require upgrades to meet current accessibility standards, prompting the renovations.

All-Rite Construction Inc. will install a new grandstand and bleachers, do new concrete work, upgrade restroom facilities and replace the announcer’s booth and walkways leading to the announcer’s booth to address the issues identified in the 2024 assessment, Los Alamos County Council documents show.

In the task order and service agreement, the county requested All-Rite Construction Inc. complete construction and renovations by July 31, 2027.

Construction is anticipated to take 25 weeks, the documents show.

When the task order and service agreement were originally up for approval in October 2025, the goal was to have the arena fully renovated in time for the Los Alamos County 2026 Rodeo, the documents show.

Now, the goal is to have all site work, ADA restroom improvements, ADA parking and sidewalk upgrades for pedestrian circulation completed in time for the rodeo.

The arena’s previous grandstand and shade structure were demolished in November 2024, clearing the way for new construction to begin, a Los Alamos County press release shows.

Source: “Los Alamos approves $2.8M arena renovation amid accessibility, safety concern“

Real estate stocks have become the latest victim of the artificial-intelligence threat.

Commercial real estate brokers are selling off for a second straight day. CBRE tumbled 12.8%, a drop that Oppenheimer pointed out as especially alarming given that the only other times the stock has tumbled further was during Covid and the height of the global financial crisis.

Jones Lang LaSalle fell 11.1% and Hudson Pacific Properties shed more than 8%. In addition, Newmark slipped more than 5%, while SL Green Realty dropped 8% and BXP shed 5.4%.

“We believe investors are rotating out of high-fee, labor-intensive business models viewed as potentially vulnerable to AI-driven disruption,” Jade Rahmani, an analyst at Keefe, Bruyette & Woods, said in a note Wednesday.

That selloff reflects a grim mood as of late in the market, which has rotated sharply out of those companies most exposed to AI disruption — first in software, then in financial firms — for more defensive sectors such as staples.

On Thursday, trucking and logistics stocks also tumbled on the release of an AI freight scaling tool. Shares of C.H. Robinson Worldwide and RXO plummeted 20% and 25%, respectively. Shares of J.B. Hunt Transport Services slid more than 6%.

Now, investors are on the lookout for what sector will be the next domino to fall, and how long any panic selling can last.

AI disrupting employment

Commercial real estate has been under pressure for some time, as higher interest rates and the rise of remote and hybrid work in the wake of the pandemic cratered demand for office space.

Investors worry that AI could sound a death knell for the sector. That point was driven home in an essay that went viral earlier this week in which OtherSide AI co-founder and CEO Matt Shumer said entry level white collar jobs will be gutted thanks to AI. The impact will be bigger than Covid, he wrote. The essay garnered 30 million views in 24 hours, Shumer claimed.

Those remarks follow Elon Musk’s comments on a podcast last week in which he said that office towers once filled with workers will one day be replaced with AI.

“Corporations that are purely AI and robotics will vastly outperform any corporations that have people in the loop. Computer used to be a job that humans had. You would go and get a job as a computer where you would do calculations. They’d have entire skyscrapers full of humans, 20-30 floors of humans, just doing calculations. Now, that entire skyscraper of humans doing calculations can be replaced by a laptop with a spreadsheet,” Musk told the hosts of the “Dwarkesh Podcast” last week.

“That spreadsheet can do vastly more calculations than an entire building full of human computers,” Musk added.

The rout in real estate stocks comes on the heels of several other sectors being dragged down by AI disruption concerns. Software stocks took a hit earlier this year after Anthropic’s latest AI model appeared able to allow businesses to do legal work and build programs for which they would otherwise pay an expensive license.

Then wealth management stocks dove after the launch of tech platform Altruist’s new tax planning tool AI powered that promises to do the work “within minutes.”

Fears overblown?

Even so, many investors expect that the recent concerns could be overblown. Indeed, in spite of all the noise, fundamentals in real estate remain strong, Rahmani noted.

“While the threat of technology disintermediation is not new to the industry, the current sell-off may overstate the immediate risk to complex deal-making, even as the long-term AI impact remains a ‘wait-and-see,’” he wrote.

In fact, CBRE reported an earnings beat on Wednesday for its fourth quarter and issued strong guidance for the full year. Its core earnings came in at $2.73 per share, topping the consensus estimate of $2.68 a share, per FactSet. The company expects core EPS to come between $7.30 to $7.60, versus the $7.39 expected from analysts.

CBRE CEO Bob Sulentic pushed back against the perception that the company’s core businesses will be disrupted by AI, saying that the firm has built cost-effective AI tools to aid, but not disrupt, the work of its brokers. He added that much of the transactions CBRE oversees are complex, requiring the firm’s deep knowledge and breadth of relationships in the field.

“We’ve become quite confident that that business really is driven by this strategic creative thinking that our brokers do,” Sulentic said during the company’s earnings call. “And we think that’s going to continue to be the case, and we haven’t seen any evidence to the contrary.”

Barclays analyst Brendan Lynch is sticking with his overweight ratings on CBRE and Newmark and would buy the weakness.

“We see the harsh sell-off among the group as inconsistent with their earnings profiles,” he said in a note Wednesday.

“We do not dismiss this risk, but note that thus far AI has been a net job creator,” he wrote. “Further, CRE servicers stand to benefit, like many other companies, from both revenue growth opportunities and cost synergies.”

However, there could be long-term implications for businesses that don’t shift from using AI as another tool in their toolboxes to a core operating infrastructure of new business models, said Macquarie strategist Thierry Wizman in a note Thursday.

For instance, for financial services and real estate companies, outcome-driven AI agents would conduct all the end-to-end workflow, replacing the human-led ones, he said.

″[F]or companies that are slow to adopt, or have built customer models based on costly human-level discretion and interaction, that transition may be fatal,” he said.

Source: “Office real estate stocks tumble as AI disruption casualties in the stock market grow by the day“