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Renter Urgency at a Turning Point

The US rental market has seen a notable decline in renter urgency over the past three years, driven by rising multifamily vacancies and falling rents. According to Apartment List survey data, the share of ‘low urgency’ renters—those in no hurry to move—reached a high of 54.4% in September 2025. However, this trend reversed in the last quarter of 2025, offering a potential early signal that renter urgency could be recovering.

Soft Markets See Least Urgency

Market-level data reveal clear geographic patterns. Sun Belt cities such as San Antonio, Phoenix, and Denver reported the highest share of low urgency renters, correlating with elevated vacancy rates and significant rent declines. These trends reflect broader national conditions, where an oversupply of units has continued to push vacancies to record highs and rents further downward. For example, San Antonio posted a 4.7% rent drop and a 9.5% vacancy rate, with 58.6% of renters in no rush to move. In contrast, tighter markets in the Northeast and Midwest, such as Chicago and Boston, showed more urgency among renters and stronger rent growth.

Link to Market Fundamentals

Apartment List’s data shows that renter urgency moves with both local supply and seasonal patterns. Renters tend to be more urgent during peak summer months and in metros with less new construction. In soft markets, property owners compete for tenants, granting renters more time to decide. Conversely, tighter supply leads to more urgent searches and higher budgets among renters seeking faster move-ins.

Possible Market Shift Ahead

Although rents continue to fall nationally and vacancies remain historically high, the supply surge is tapering. If the uptick in renter urgency persists, it could foreshadow rising demand and tighter conditions later in 2026 as the wave of new deliveries slows. The next few quarters will be critical for assessing whether this shift in renter urgency marks the start of a new cycle in the US rental market.

Source: “Renter Urgency Trends Shift Across US Markets“

Congress ended a 43-day government shutdown on Nov. 13, 2025—the longest in in U.S. history. The continuing resolution passed that day funds the federal government only through Jan. 30, 2026, making another shutdown possible in the near term.

Whether shutdowns last days or weeks, their impact on commercial real estate—particularly multifamily—follows some patterns. Understanding these patterns can help you prepare.

What happens during a government shut down

The federal government operates on a fiscal year beginning Oct. 1. When Congress hasn’t passed appropriations bills to fund federal operations by that date, it typically passes a continuing resolution (CR) to maintain current funding levels temporarily.

A government shutdown occurs when Congress fails to pass either appropriations bills or a CR before funding expires. Without enacted funding, federal departments and agencies halt all nonessential work and may shut down entire organizations.

“Government institutions and personnel deemed essential are exempted, meaning they will continue to work despite the shutdown,” said Ginger Chambless, Head of Market Insights for Commercial Banking at J.P. Morgan.

The government won’t process payroll during the shutdown.

The likelihood of a government shutdown

“The fight is far from over,” said Tom LaSalvia, Head of Commercial Real Estate Economics at Moody’s Analytics. Given the current political climate, “health care will again be a sticking point unless a compromise bill is voted on soon.”

However, “headwinds from the recent shutdown, as well as the midterm elections, could give lawmakers a greater sense of urgency to come together more quickly,” Chambless said.

LaSalvia noted additional pressure. “Combined with an economic slowdown, the labor market is either in a recession or on the brink of one—job growth has been nonexistent since April,” he said. Neither party wants to risk blame for worsening that situation.

Historically, when shutdowns appear imminent, Congress often passes another stopgap CR to temporarily extend funding and delay the confrontation.

Why the length of a government shutdown matters

Shutdowns can last days or weeks. “The impact to economic growth and market sentiment tends to grow the longer the shutdown lasts,” Chambless said.

For example, a two-day 2018 shutdown had minimal economic effect, while the 43-day shutdown in 2025 had significant impacts, including:

• An estimated 1.4 million federal employees furloughed or working without pay
• Delays in publishing official economic data, including the U.S. jobs report and the Consumer Price Index—creating a challenging decision-making environment
• The Congressional Budget Office estimated the GDP growth rate in Q4 2025 would be reduced by 1.5%, with a 2.2% increase in Q1 2026

How a shutdown could impact commercial real estate

A government shutdown’s impact on commercial real estate varies, but the current interest rate environment creates different dynamics than previous shutdowns.

“A shutdown—a show of further government dysfunction—could harm the U.S. government’s credibility and put pressure on government debt,” LaSalvia said. “Any additional shock to interest rates amplifies the already-difficult refinancing situations for many commercial real estate loans.”

“It’s difficult to predict how interest rates might respond to a government shutdown as prevailing economic and market conditions will also factor in,” Chambless said. “On one hand, perceived weakness in U.S. governance could drive interest rates higher, while volatile market conditions could prompt a flight to quality, pushing Treasury yields lower. 10-year Treasury yields traded in a relatively tight 20 basis point range during the six-week government shutdown in 2025.”

Within the industry, the government plays a greater role in multifamily housing than other sectors. “Low Income Housing Tax Credit, Section 8 and Federal Housing Administration programs are all at risk, but mostly in the form of delays rather than long-lasting impacts,” LaSalvia said.

Government assistance may also be delayed, affecting rental payments. Affordable housing faces the greatest impact, but postponed payments can also create problems for workforce and market-rate rental owners, depending on their resident mix.

How multifamily property owners can prepare for a shutdown

Multifamily investors can take steps to prepare for potential shutdowns, including:

• Assess exposure: While the specific agencies and services affected by a shutdown vary depending on funding legislation, past shutdowns serve as a guide. Incorporate shutdown scenarios into your cash positioning and forecasting process to estimate potential liquidity needs.
• Build reserves: Multifamily operators—especially affordable housing providers that rely on government assistance programs for rent payments—should maintain reserves to cover at least six months of debts and operating expenses.
• Streamline operations: Make your processes more efficient and optimize cash before and during a shutdown. Tactics can range from creating economies of scale to choosing payment methods that maximize liquidity.

Source: “How a government shutdown impacts multifamily“

The pandemic’s aftermath saw yet another prediction of retail’s demise. But fast-forwarding half a decade, and retail has been a robust commercial real estate asset class. Despite the current K-shaped economy, shopping cutbacks from lower-income households and uncertain consumer sentiment, experts told Connect CRE that the sector is entering 2026 in decent shape.

While other CRE categories have been volatile or slowing, “retail has remained solid,” said Darren Pitts, co-founder and executive vice president of Velocity Retail Group. “The overall view for the sector in 2026 is that it will be steady.”

The 2025 Analysis: Steady

“Steady” was one word to describe retail over the past year. The other was “resilient.”

“Overall, retail performance was surprisingly strong, despite economic uncertainty and international conflict throughout the year,” said Axiom Broker Stephanie Skrbin. “Leasing activity remained strong, especially for A and B centers, while investment activity and pricing increased from last year.”

Additionally, physical locations have become even more relevant in the wake of disruptions from store closures, e-commerce, and the pandemic. According to Avison Young’s Principal and Director of Market Intelligence, Meghann Martindale, this led to strong leasing and investment fundamentals. Additionally, “new experiential, omnichannel and mixed-use formats invigorated the sector,” said Martindale, Avison Young’s Principal, Director Market Intelligence, Retail.

J. Wickham Zimmerman agreed that experiential retail motivated consumers to spend more time on-site. Additionally, “consumers prioritized convenience and price sensitivity,” added Zimmerman, who is CEO with Outside the Lines, Inc.

However, the concept of “experiential” continues to change. Said Martindale: “There are so many different experiential concepts across immersive, interactive/product testing, entertainment, food and beverage and entertainment. Some grew, some shrank, but this was very specific to individual brands.”

Still, not everything was roses in the retail sector. Progressive Real Estate Partners’ President and Head Coach, Brad Umansky, noted that the sector’s performance over the past year was a solid “B.” The upside was that retail occupiers continued to expand, capital markets began to loosen, and occupancy was high across many centers.

But a lot of anchor and sub-anchor space has come to market over the past 12 to 24 months. “Although a substantial amount of this space is leased to retailers like Sprouts, Grocery Outlet, Savers, Burlington and others, there is still a substantial amount of large space on the market that may take many years to absorb,” Umanksy said.

Grocery Leads the Way

Retail encompasses a broad range, from the 1.3-million-square-foot regional mall to the 3,400-square-foot neighborhood restaurant. Also in this category are grocery stores. The experts unanimously agreed that this sub-sector demonstrated robust performance over the past year, followed by discount retailers.

“Market leaders like Aldi continue to lead with a value platform in the grocery sector,” Pitts noted. Furthermore, discount retailers, including Costco, Wal-Mart, Ross, TJX, and others, continue to grow as a value offering to consumers, he added.

Jim Dillavou explained that the grocery strategy has changed. Rather than service and QSR tenants coming in around grocery-anchored centers, “grocery anchors started demanding adjacency to salons, fitness, dental, pet services and repair,” said Dillavou, principal and co-founder of Paragon Commercial Group. The reason? “The data showed that these uses drove longer dwell times and higher basket rings,” he said.

Yet grocery had its issues. “Grocery leasing was bifurcated with the Kroger/Albertsons deal first on and then off, which put a chill on normal grocery growth,” NewMark Merrill Companies’ CEO and President Sandy Sigal said. He went on to say that Walmart didn’t open many stores, while traditional grocery consolidation will impact the sector. “That being said, the growth of ALDI, Sprouts, Grocery Outlet, Trader Joes and the Specialty grocery segment is still strong, but selective,” he commented.

And while discount stores grew, they “experienced pressure from inflation, labor costs and changing consumer behavior,” Skirbin pointed out. “This led to slower leasing momentum and some closures.”

Supply/Demand Considerations

Then, there were the bankruptcies.

Baker Katz Principal & Co-founder Jason Baker explained that, according to Coresight, 2025 saw 569 closures, compared with 1,118 openings. “Most of those closures represented brands that have been in and out of trouble for years,” he observed.

And, according to Umansky and Martindale, the closures meant new space on the market. The process generated significant leasing activity to fill the vacated space, Umansky said.

However, weaker markets didn’t fare so well. “Releasing takes longer, and retail may no longer be the highest and best use if that retail node has lost relevance,” Martindale observed.

Adding to the problem was, and continues to be, long-term vacant space. “The challenge is that if a big box space did not get leased over the past 12 months, it is likely that the typical users for these spaces are not going to lease these spaces, and therefore it will take more unique users and creative landlords to get these spaces leased in 2026,” Umansky said

On the other hand, vacant space helped offset the decline in retail construction in 2025. The experts forecast that 2026 will be more of the same.

“Development will remain somewhere between tough and impossible to pencil absent some form of transaction underwriting “subsidy” that juices the mode like subsidized land, municipal assistance or creative financing,” Jim Dillavou observed.

Velocity Retail’s Pitts agreed that development will likely remain expensive. In addition to reducing space in an already tight market, “tenants will be required to step up to higher new construction rents to make new store growth feasible to achieve their growth goals,” increasing rents and valuations, he said.

Still, some are benefiting from a shrinking pipeline. For 2026, “the limit in new construction will keep vacancy low and provide landlords with the advantage in rent negotiations,” Skrbin with Axiom Retail said. She added that restaurants prefer second-generation space, “so we’ll continue to see increased competition when opportunities arise in that space.”

Furthermore, “through lack of new construction and repurposing of obsolete space, we have emerged with healthy and resilient stock,” said Avison Young’s Martindale.

More to Know in the Coming Year

In addition to fewer deliveries, 2026 predictions included the terms “cautious optimism” and “steady.”

For buyers and investors, “strong leasing tailwinds coupled with continued capital flows into retail will result in a competitive acquisition landscape,” Dillavou said. At the same time, 2026 will be a good time to “sell value-add assets as a competitive buyer pool in search of yield will be ‘risk on’ when it comes to underwriting,” he added.

Pitts explained that retail in top-tier growth markets should remain a favored asset class for investors. This is because “the strong retailers are getting stronger and will continue to grow market share both in stores and online,” he added.

Furthermore, experiential retail will continue to matter. Said Zimmerman with Outside the Lines: “Retail centers that blend necessity-based retail with experiential offerings, prioritize dwell time, and create authentic places for people to gather will continue to perform well and show strong ROI.”

As a result, tenants and owners should prioritize issues such as placemaking, flexibility, and amenities to remain relevant. “Retail centers that fail to evolve risk becoming obsolete as both retailers and consumers gravitate toward destinations that offer more than transactional shopping,” Zimmerman noted.

However, the experts shared sector risks in the coming year, including fiscal and monetary policy. “Interest rate changes will be key for investors and REITs in managing their retail portfolios and dealing with upcoming refinancing requirements,” Pitts said.

Martindale said that inflation acceleration could pose issues, along with category-specific shakeouts occurring in the retail pharmacy space. She also explained the risk of unproductive space versus empty space, “meaning tenants that don’t drive traffic, loyalty, sales and cross-shopping.”

Finally, “we may be approaching a market correction, as rising costs, tech debt, and shifting consumer behavior are forcing retailers to modernize or fall behind,” Skrbin explained.

Still, in the ever-evolving retail landscape, NewMark Merrill’s Sigal indicated that the sector is undergoing a reset. “This will reward operators,” he added. “Rapid expansion for store count is out, while rational expansion and sizing are in.”

Source: “The 2026 Retail Forecast: Not Too Different from 2025“