Interview by John Nelson
What a difference a year can make.
At this time last year, real estate professionals displayed a sense of confidence and optimism about their 2025 prospects. This year, tariffs, government shutdowns and stubborn inflation have led to a general sense of unease for the year ahead.
So finds Emerging Trends in Real Estate 2026, the latest installment of the annual outlook for the commercial real estate industry that PwC and the Urban Land Institute (ULI) jointly
publish. The organizations surveyed more than 1,700 stakeholders — including brokers, developers, investors and lenders — in this year’s report, which was adequately themed “Navigating the Fog.”
Southeast Real Estate Business recently caught up with Andrew Alperstein, real estate partner at PwC, to discuss creating the Emerging Trends report, the resurgence of the Northeast and the health of several sectors, including seniors housing, self-storage and office. What follows is an edited interview:
Southeast Real Estate Business: Were there any surprises in the data or interview process as PwC and Urban Land Institute created ‘2026 Emerging Trends in Real Estate’?
Andrew Alperstein: I’m involved in a lot of the interviews that we do, and I see the survey results and work with a number of the authors. What was interesting to me was that there was this consensus around a lack of conviction. We use ‘glass half-full, glass half-empty’ language in the report. Some people see the opportunities but are still cautious. Other people are being cautious until they get more transparency into tariffs, immigration policy, interest rates, government shutdowns — into all the things that are uncertain.
We spend a lot of time on sentiment in the publication, which definitely moderated from the year before where there was more optimism. Typically, we have a bit more conviction either way, and this really felt like a lot of people are on the fence, and that’s why we went with the theme ‘navigating the fog,’ because you’ve just got to navigate carefully.
As far as what surprised us, geographically there was a bit of a resurgence for the Northeast. This is the first time in a number of years that we had four Northeast markets in the top 10. That’s mainly a reflection of Manhattan’s bounce back with its return to office, and just some of the energy around that area. The Sun Belt continues to be extremely strong, which we saw with Dallas, Miami and Nashville.
SREB: Speaking of the Northeast, Jersey City came in as the No. 2 ‘Market to Watch’ in the report. What led to this ranking in your mind?
Alperstein: The cities particularly like to highlight where they end up in the top 10. I tend to look at it a little bit more of sentiment around macro and regional themes rather than as a hard data, science-based report. It’s more about the trends that we see, both regionally and the types of markets that are moving. You look at a Brooklyn and a Jersey City, investors are not saying ‘that’s top of my list,’ but when you look at some of the fundamentals, their proximity to New York City, their relative affordability and some of the amenities, it’s an interesting story, particularly for younger people who are in the area and for employers that are thinking about where the employee base is going to come from. At the same time, you’ve seen cities like Boston drop off a little bit because it is more centered on life sciences, healthcare funding and foreign students.
SREB: And topping off this year’s rankings was Dallas. Why are real estate professionals so bullish on this market?
Alperstein: Dallas makes a lot of sense to us from a No. 1 perspective, if you look at particularly how the financial services sector has evolved there. The city has had this migration of corporate headquarters, big back offices and population growth. The added layer in recent months has been the financial services headlines including the launch of the Texas Stock Exchange. Pretty much all the major financial services companies now have significant operations there. It’s a business-friendly environment, and young people seem to like the balance of affordability, jobs and convenience. For the affordability piece, for a while there the Sun Belt was so much more affordable than California or the Northeast, but that delta has shrunk.
SREB: The report prominently features the seniors housing sector. As you talk to your sources about seniors housing, what do they like about the demand picture that’s being created?
Alperstein: Seniors housing has favorable demand and supply metrics. Not every single one of the people turning 80 is going into a seniors housing facility, but the trend is there. The supply side is interesting too because there has been relatively little new supply. And a lot of that new supply is at the top end of the market in typically more affluent areas. We had a lot of disruption during COVID in terms of health issues in the facilities and the availability and cost of staffing; those put a lot of pressure on operations and profitability, and that really subdued the supply pipeline.
We’ve also seen profitability improve in existing inventory, so not only do you have the future outlook that looks positive, but we’re seeing it on the ground, too. So much supply is needed for the middle market of seniors housing, but are we going to develop the supply at the right affordability levels to match with the demand?
SREB: The report mentions how the self-storage sector is becoming more institutionalized. What was your main takeaway about the health of self-storage from conducting your surveys?
Alperstein: We got some interesting data points in the publication. COVID was a nice catalyst for the self-storage business, because people were not moving as much, and that has persisted in the high interest rate environment. People are typically staying in their current housing longer, and that is one of the demand drivers for self-storage. People acquire things and don’t have place to keep them, which leads to self-storage. The opposite — moving — is the other driver. I think the expectation is that hopefully as rates come down, we’ll see more housing activity, whether it’s owned or leased, and that will drive self-storage demand. We’ve also seen completions start to tail off after a bit of an uptick post-COVID.
This was a sector that was smaller with less institutional owners and operators. We’ve seen probably over the past five years, even pre-COVID, the sector starting to consolidate and become more institutional. Many of the sponsors have large portfolios with tech-savvy platforms, so it’s certainly a more accepted property type.
What we supplemented in this year’s report was some of the new uses of self-storage, as opposed to just traditional storage. Folks are using units for other purposes, almost as an additional bedroom or room for their house where they might have their golf simulator or a movie room. None of those are macro-economic drivers, but there are some interesting trends we included in the report. Self-storage is a sector that we’ve got to keep an eye on because its fundamentals drive off activity in other sectors.
SREB: Probably more than any other asset class, the office sector has seen the most turbulence the past few years. How is the office sector being viewed now by investors?
Alperstein: We wanted to highlight the office story as one of the primary trends because really for the first time since COVID, we’re starting to see some green shoots for office in certain submarkets and geographies. We’re clearly not out of the woods yet, and we’re a long way from saying we’re bullish on office. If you look at Park Avenue and Midtown Manhattan, we are seeing some new supply, and we are seeing those lease-up at historically high rent levels with amenities that are differentiating the offering for tenants. Tenants are willing to pay those record rents to get the right location in the new buildings that are tech-enabled with the right amenities and the right collaborative spaces. We talked to a number of developers and office owners in New York who echoed that feedback.
At the same time, they would acknowledge that there’s a significant inventory of office buildings that do not fit their profile. While we have seen some traction and conversions in certain pockets, there is a long way to go for the balance of office, but there are tenants that are willing to put a stake in the ground and sign long-term leases at high rents, and there will be some trickle-down effect. There is so little new supply in the pipeline that any tenant looking for newer space is going to struggle to find it in a lot of these markets.