A slowdown in construction is intersecting with the early stages of recovery in the U.S. commercial real estate cycle, creating a more fundamentals-driven environment for investors. Rich Hill, senior managing director and global head of research and strategy at Principal Real Estate, said in an interview with IREI, development activity has declined across property types, particularly in multifamily and industrial, as higher labor, material and financing costs have constrained new supply. At the same time, the market is shifting away from the post-global financial crisis playbook, where accommodative policy and cap-rate compression supported returns. In today’s higher-for-longer rate environment, performance is expected to rely more heavily on net operating income growth and active asset management.
How does the slowdown in construction intersect with the current stage of the commercial real estate cycle?
The volume of construction eased in 2025 acros
