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World desk10 min

How Construction Activity Affects Commercial Real Estate Services Firms

Construction creates project and leasing opportunities for commercial real estate services firms, but completed space can intensify competition. The impact depends on local demand, property type, costs, preleasing, and timing.
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Construction affects commercial real estate (CRE) services firms in two directions: projects create advisory, brokerage, leasing, and management opportunities, while completed buildings add space that may intensify competition for tenants. Whether activity helps or hurts a services firm depends on local demand, financing and development costs, preleasing, vacancy, rents, property type, and the stage of each project—not simply on how many buildings are being built.

For brokers, property managers, valuation teams, and investment advisers, the useful question is not just “Is construction up?” It is “What is being built, where, for whom, and when will it reach the market?”

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How does construction activity affect commercial real estate services firms?

Construction changes the work available to CRE services firms and the conditions in which they do that work. Before and during a project, owners may need development advice, market analysis, leasing strategy, and help arranging transactions. As a building nears completion, leasing teams may market its space and brokers may represent landlords or tenants. After delivery, a property can create ongoing management assignments and valuation or investment work.

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But a new building is also new competing supply. If space is delivered faster than occupiers absorb it, landlords may face more vacancy, slower leasing, or pressure on rents. That can make it harder to lease both new and existing properties. If demand is strong and new supply is limited, construction can instead address a shortage and create additional business without necessarily weakening existing assets.

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These are market mechanisms, not a measured revenue formula. The outlooks and economic-impact figures discussed here describe CRE activity and the wider economy; they do not directly quantify how construction changes fees, revenue, or staffing at CRE services firms.

How the effect moves through a project’s life cycle

Construction does not create the same work for every service line at the same time. The path runs from project planning to construction, delivery, lease-up, and ongoing ownership. A start, a completion, and a stabilized, occupied building are different events, so firms should not treat them as interchangeable measures of current business.

Planning and development

Before a project proceeds, owners and investors may need advice about market feasibility, location, property type, development strategy, and the likely demand for space. Construction and financing costs affect whether a project can proceed and when. When cost or policy uncertainty makes a project harder to underwrite, decisions can be delayed or changed, shifting when related advisory assignments might occur. JLL’s 2026 U.S. construction perspective describes policy and cost uncertainty as factors affecting development decisions.

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Construction and preleasing

Once a project is moving forward, brokerage and leasing teams may work on marketing, tenant outreach, and lease negotiations. Preleasing—the leasing of space before a building is complete—provides an important distinction: a project with committed occupiers presents a different supply risk from a speculative building still seeking tenants. The two projects add physical space, but the amount of uncommitted space entering the local market differs.

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Delivery and lease-up

At completion, the new inventory competes for occupiers with existing properties. The effect on leasing teams depends on the amount of space delivered relative to demand, the location and quality of the space, and the terms landlords can offer. Successful lease-up can support brokerage and leasing assignments; a slow lease-up can extend the work of marketing a property while increasing competition for tenants across the area.

Operations, valuation, and investment

After delivery, owners may need property management, leasing support, valuations, and investment advice. A newly occupied asset can become an ongoing management assignment, but the relationship between completions and management work is not immediate or automatic. Occupancy, ownership decisions, and the services an owner engages determine what work follows. Changes in leasing prospects, vacancy, and rents can also inform valuations and investment decisions for both new and existing properties.

Why construction starts alone can mislead

Construction starts are an early signal about possible future space, not a count of what is already available to lease. Projects can take time to complete, and some planned or active projects may be delayed or altered as costs, financing, and demand change. Completions show space that has reached the market; preleasing indicates how much of that space already has occupiers lined up. Neither measure by itself establishes whether supply is excessive.

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A useful market assessment compares the development pipeline with what is happening to occupier demand and existing inventory. A large pipeline may be manageable where leasing demand is robust, while a smaller amount of new construction can still add pressure in a submarket where vacancy is already elevated. Conversely, restrained building can contribute to scarcity in a location or quality tier where tenants want space and suitable options are limited.

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The NAIOP Research Foundation’s 2026 research provides context for considering how CRE activity affects the economy. It is not a firm-level revenue measure. The same distinction matters when interpreting broader impact figures: economic activity generated around commercial property cannot be treated as fees earned by brokers, managers, or advisers.

Sector and location change the answer

“Commercial real estate” covers property types with different occupiers, development pipelines, and demand patterns. A national construction total can conceal a shortage of one kind of space in one market and oversupply of another elsewhere. The following sector descriptions reflect outlooks, not guarantees about every city or asset.

Property type What construction can mean for services firms What to examine
Office Leasing recovery can vary by market and building quality. Restrained construction of prime space may contribute to scarcity in that tier, while weaker or secondary assets may face competition and need repositioning. Local leasing activity, vacancy, quality tier, and the pipeline of comparable space. CBRE’s 2026 outlook describes differences between prime and secondary assets.
Industrial and logistics New supply interacts with demand from logistics, manufacturing, data centers, and research and development. A pullback in construction does not by itself show whether local space is tight or plentiful. Local inventory, absorption, occupier demand, and asset quality. Colliers’ 2026 outlook describes a construction pullback alongside demand in these sectors.
Retail Disciplined development and tenant demand can leave supply tight; deliveries in weaker locations can add leasing pressure. Location-level tenant demand, nearby deliveries, vacancy, and rents. See Colliers’ 2026 outlook and NAIOP’s 2026 research.
Data centers Strong demand does not guarantee rapid delivery. Power availability, construction delays, and supply constraints can lengthen project pipelines and shift advisory and leasing schedules. Power access, construction progress, and delivery timing, as well as demand. See CBRE’s 2025 midyear review and JLL’s 2026 construction perspective.
Healthcare and other specialized assets Completions and demand can move independently of general office construction, so broad office or national construction measures may not describe the relevant market. Asset-specific demand and the local pipeline. CBRE’s 2026 outlook reports a drop in healthcare completions.

Use a local and sector-specific view before drawing conclusions about a firm’s exposure. Even within a sector, the difference between a high-quality building in a sought-after location and a less competitive asset can matter more than the national direction of construction.

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How the effect differs by service line

  • Development advisory: A changing pipeline can create work assessing feasibility, timing, and market conditions. When costs or financing make a project less viable, assignments may be delayed or priorities revised.
  • Brokerage: Projects can create landlord representation and tenant-representation opportunities. More available competing space can also complicate transactions and increase the importance of location, quality, and lease terms.
  • Leasing: Teams may be involved before delivery through preleasing and after completion during lease-up. Their prospects depend on occupier demand relative to both new deliveries and existing space.
  • Property management: Completed, operating properties can require ongoing services. A project does not automatically turn into a management assignment: the owner’s needs, occupancy, and service arrangements matter.
  • Valuation: Construction can change the set of comparable properties and the outlook for rents, vacancy, and future competition. The effect depends on local market evidence and the asset being valued, not simply on the number of starts.
  • Investment services: Project costs, financing conditions, expected leasing, and competing supply may affect investment decisions and advice. Uncertainty can alter transaction timing as well as project plans.

These are different exposures, not interchangeable benefits. A development-focused team may be sensitive to whether projects proceed; a property-management team is more concerned with operating assets and the work owners engage it to perform. A single headline about construction activity will not reveal which service line is affected most.

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What current U.S. outlooks say—and what they do not

CBRE’s August 4, 2026 midyear release characterizes construction as restrained in most sectors, while identifying technology expansion, reshoring, consumer spending, and demographic demand as support for selected property segments. This is CBRE’s outlook, not a universal description of every market or a direct forecast of services-firm earnings. Its 2026 outlook also describes variation in leasing recovery and supply across sectors, including differences in office and industrial demand and a drop in healthcare completions.

Those observations illustrate why the direction of construction cannot be read in isolation. A restrained pipeline may limit new competition in one segment, but it does not ensure strong leasing or management demand if occupiers are weak. Conversely, active development can coincide with demand that absorbs the new space.

Forecasts also need their dates and status attached. The American Institute of Architects’ January 17, 2025 Consensus Construction Forecast said: “After increasing in 2023 and 2024, construction spending for nonresidential buildings—commercial, industrial, and institutional facilities—is projected to slow dramatically this year and next.” That was a forecast made in January 2025, not an observed result for 2025 or 2026.

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The same AIA forecast projected nonresidential building construction spending gains of 2.2% in 2025 and 2.6% in 2026. Within that forecast, commercial spending was projected to rise 1.7% in 2025 and 4.2% in 2026, while industrial spending was projected to rise 2.6% in 2025 and decline 2.5% in 2026. These figures are dated projections, not verified outcomes, and they should not be used as current measured growth without outcome data.

How to assess whether construction is helping or hurting a firm

For an owner, analyst, or services firm, compare the same local market, property type, and time frame. Pair forward-looking pipeline indicators with completed supply and evidence of leasing. Then map those conditions to the firm’s service lines and the stages of projects it serves.

  1. Define the exposure. Specify the local market and property type, then identify whether the firm’s work is concentrated in development advisory, brokerage, leasing, management, valuation, or investment services.
  2. Separate pipeline from delivered inventory. Track projects under construction and expected deliveries separately from completed space already competing for tenants. Note whether projects are speculative or preleased.
  3. Check demand against supply. Look at occupier demand and leasing activity alongside vacancy and rent trends. A delivery total without absorption and leasing context cannot establish whether the market is tightening or loosening.
  4. Compare the stock that tenants can actually choose. Examine building age and quality tier as well as location. New, prime space does not compete identically with every existing property.
  5. Account for project feasibility and timing. Consider construction and financing costs, policy or cost uncertainty, and potential delays. These can change which projects proceed and when a service opportunity may arise.
  6. Map the timing to the work. A planned project may create advisory needs before it creates leasing work; lease-up follows delivery, and ongoing management work follows operation and engagement by the owner. Do not count all stages as immediate or guaranteed revenue.
  7. State the conclusion at the right scale. Describe conditions for the relevant market and service line. Do not infer a firm’s revenue or staffing change from national starts or broad economic-impact estimates alone.

A useful monitoring set is therefore: starts and projects under construction; expected completions; preleasing; vacancy; rents; occupier demand and leasing activity; project costs and financing; and the property type and quality tier involved. Looking at these measures together helps distinguish a project pipeline from space already on the market and demand from mere supply potential.

What broad economic-impact figures can—and cannot—show

The NAIOP Research Foundation’s 2025 U.S. edition reports the combined contributions of new commercial building development and existing building operations in 2024. It gives $898.5 billion in direct expenditures, $2.5 trillion contributed to U.S. GDP, $862.5 billion in personal earnings, and 14.2 million jobs supported. These figures cover development and ongoing operations together; they do not isolate construction’s effect on CRE services firms.

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The report also states: “Each $1 of construction spending generated a total value of $2.95 to the economy, reflecting the cumulative effects of the initial construction expenditures as they cycle throughout the economy.” The $2.95 figure is a broad economic multiplier described by the report. It is not a return to a construction company, nor is it $2.95 of revenue earned by a CRE brokerage, manager, or advisory firm per dollar spent.

That boundary matters because the economic activity associated with development and building operations includes effects beyond fees earned by service providers. The figures show the scale of commercial real estate’s wider economic contributions, not the causal revenue result for a particular type of firm.

The practical conclusion

Construction can create work for CRE services firms while making leasing more competitive once new space arrives. The net effect depends on where projects are, what type and quality of property they add, whether occupiers are already committed, how costs and financing affect delivery, and whether demand keeps pace. Evaluate the local pipeline, deliveries, preleasing, vacancy, rents, and occupier activity together, then relate them to the firm’s service line and project timing. National outlooks help frame the market, but they do not establish a causal revenue impact for services firms.

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