When JLL introduced its six forces reshaping global commercial real estate in late 2025, the 2026 outlook was relatively optimistic. The forecast suggested renewed momentum supported by shrinking supply pipelines, economic growth, easing trade concerns, moderating inflation and lower interest rates.
Six months later, things have greatly changed. The Middle East conflict, the closure of the Strait of Hormuz and continued trade tensions mean global market uncertainties.
“For now, we expect somewhat lower growth, higher inflation, and a change of direction in interest rates from what we were anticipating at the start of the year, and that these effects prove temporary and reversible,” JLL said in its recently released “Global Real Estate Outlook Mid-Year, Updated” report.
JLL said six structural forces continue to shape international CRE markets.
Cost Management as a Strategic Priority
Controlling costs was never in doubt. However, energy, commodity and freight disruptions caused by geopolitical conflicts elevated cost management from a priority to a primary business driver for corporate leaders.
Higher fuel, materials and logistics costs are impacting operating budgets, increasing construction expenses, raising fit-out costs and slowing project timelines.
JLL noted that the strategies companies are using to manage costs have not changed. But the urgency behind those efforts has increased.
Supply Constraints Create New Opportunities
Development pipelines were already shrinking across many property sectors in mature markets. Rising construction costs and uncertainty around project feasibility could limit additional starts.
JLL expects well-located secondary assets to benefit from demand spillover, particularly in markets with limited available space. The environment could also create additional opportunities for owners to retrofit and reposition existing properties rather than pursue new construction.
Buildings Matter More Than Ever
The workplace experience continues to influence occupier decisions, with technology, amenities and building quality becoming important.
JLL’s Future of Work Survey found that 66% of organizations prefer AI-enabled buildings over basic building management systems. In comparison, 62% said they would prioritize building quality and amenities over a prime location.
Occupiers also said that hospitality-inspired, AI-enabled buildings could transform their portfolios over the next three to five years.
AI Moves From Experimentation Toward Operations
The anticipated “pilot fatigue” around artificial intelligence is real, JLL said. But the larger question is how AI will impact business operations and workforce requirements.
AI agents have started to sever the connection between company growth and employee headcount, particularly in knowledge-based industries. That raises questions about office demand and workplace strategies.
However, the impact will vary by market and industry. AI may reduce demand for some roles while creating new opportunities in others, making its ultimate effect on employment and real estate difficult to predict.
Energy Security Becomes a CRE Consideration
Reliable, affordable power has moved from a future concern to an immediate factor influencing development and leasing decisions.
Power grids designed for slower, more predictable demand are facing increased pressure from data centers, advanced manufacturing and electric vehicle infrastructure. Longer connection timelines, grid congestion and capacity uncertainty are forcing owners and occupiers to determine energy availability earlier in the decision-making process.
While grid-scale clean energy now represents the majority of new power generation, regional disparities are creating mismatches between where new capacity is added and where energy-intensive demand is growing.
Private Wealth Expands Its CRE Role
Private capital is playing a larger role in commercial real estate investment as family offices and high-net-worth individuals increase their sector exposure.
At the same time, narrowing bid-ask spreads indicate improving pricing clarity, while deeper bidding pools suggest investors are returning as real estate valuations become more attractive.
A competitive debt market is also creating opportunities for both experienced investors and new entrants seeking CRE exposure.
The Bottom Line
JLL said investors should continue monitoring market-specific conditions and remain focused on sector and geographic differences when identifying opportunities.
For occupiers, scenario planning will be critical as companies navigate the combined impacts of AI adoption, energy security, supply chain disruptions and changing economic conditions.
The post The Forces Impacting CRE as AI, Energy and Supply Constraints Take Hold appeared first on Connect CRE.
