Across all three sectors, the data reflects a market that remains active but increasingly selective. Overall vacancy changed little during the reporting period, yet the underlying conditions varied considerably by property type, location, building quality, and tenant requirements.

Key Takeaways:

1. Greater Lansing’s commercial real estate market remained broadly stable in H1 2026, but performance varied sharply by property type, location, and building quality.
2. Industrial demand remains strongest for smaller, modern buildings, while office tenants are increasingly selective.
3. Retail activity continues despite higher project and occupancy costs.

Industrial Market: Limited Movement Masks a Divide in Available Supply

Greater Lansing’s industrial vacancy rate remained virtually unchanged at 12.5% in H2 2025 to 12.3% in H1 2026. Although the overall change was modest, the market remains divided between a limited number of large vacancies and a much tighter supply of smaller, functional industrial buildings.

The West Submarket recorded the region’s lowest industrial vacancy rate at just 0.8%, highlighting the continued strength of areas with convenient highway access, established infrastructure, and proximity to major employers.

Demand remains concentrated among users seeking modern buildings with efficient layouts, adequate clear heights, loading capabilities, and sufficient power. Older or highly specialized properties may require longer marketing periods, particularly when significant improvements are needed to meet current operational requirements.

Looking ahead, Greater Lansing’s industrial sector is expected to remain relatively stable. Modest construction activity, limited availability of modern space, and continued investment in advanced manufacturing should help support the market through the remainder of 2026.

Martin’s Industrial Market Professionals:

Van W. Martin, SIOR, CCIM, CRE

President and CEO of Martin Commercial Properties

Christopher Miller, SIOR

Senior Vice President, Industrial & Investment Advisor

Office Market: Stable Overall, but Performance Remains Segmented

The office vacancy rate for buildings of 5,000 square feet or more was stable from 18.4% to 18.3% during H1 2026.

While that figure suggests overall stability, it does not fully reflect the differences within the market. Modern suburban properties with updated amenities, convenient parking, and efficient floor plans continue to outperform older buildings and properties requiring substantial tenant improvements.

Downtown Lansing and portions of the region’s older office inventory continue to face greater challenges. Hybrid work, changing space requirements, the cost of renovations, and the State of Michigan’s movement toward greater use of state-owned facilities are all affecting leasing activity.

Tenants remain active, but many are taking a more deliberate approach to real estate decisions. Building condition, operating costs, workplace experience, and flexibility have become increasingly important considerations.

The office market is expected to remain stable but segmented during the second half of the year. Well-maintained and appropriately priced properties should continue to attract interest, while less competitive assets may require capital investment or repositioning.

Martin’s Office Market Professionals:

Van W. Martin, SIOR, CCIM, CRE

President and CEO of Martin Commercial Properties

Eric F. Rosekrans, CCIM, CPM

Executive Vice President

Thomas Jamieson, SIOR

Senior Vice President

Retail Market: Vacancy Holds Steady as Costs Affect Tenant Decisions

Greater Lansing’s retail vacancy rate remained unchanged at 17.1% during H1 2026, matching the rate recorded in H2 2025 and improving slightly from 17.4% one year earlier.

Performance varied by submarket. The East Submarket’s vacancy rate improved from 11.0% to 10.3%, supported by continued activity along established retail corridors. Large-format retail activity remained concentrated in the West Submarket, reinforcing the area’s position as a primary regional shopping destination.

Retailers continue to evaluate opportunities, but rising construction, tenant improvement, and occupancy costs have extended decision-making and opening timelines. Inflation, tariffs, and uncertainty surrounding consumer spending are also contributing to a more cautious environment.

Even with these challenges, Greater Lansing’s retail market remains active. Vacancy is expected to gradually decline as announced tenants open and projects currently under construction are completed.

Martin’s Retail Market Professionals:

Van W. Martin, SIOR, CCIM, CRE

President and CEO of Martin Commercial Properties

Carson Patten

Vice President, Retail Advisor

Samantha Le

Senior Associate, Retail Advisor

A Market Defined by Selectivity

The H1 2026 data points to a commercial real estate market that is largely stable at the headline level but more nuanced beneath the surface.

Industrial users continue to compete for smaller, well-equipped buildings. Office tenants are favoring updated properties that support changing workplace expectations. Retailers remain interested in strong locations but are scrutinizing project costs and consumer conditions more carefully.

For property owners, these conditions make competitive positioning increasingly important. Pricing, building condition, location, amenities, and the ability to accommodate a tenant’s operational needs can have a significant effect on marketability.

For tenants and buyers, a clear understanding of submarket conditions can help identify opportunities that may not be apparent from regional vacancy figures alone.

Martin Commercial Properties’ complete H1 2026 Industrial, Office, and Retail Market Insights Reports provide additional data, submarket analysis, notable transactions, and expectations for the remainder of the year.

Van W. Martin, SIOR, CCIM, CRE

• President and CEO of Martin Commercial Properties

“The first half of 2026 was characterized by thoughtful decision-making rather than rapid expansion. Businesses continue to move forward, but they’re taking more time to evaluate space needs, capital investments, and long-term operating costs. That’s reflected across each property type in different ways.

One of the consistent themes across all three reports is that quality matters. Well-located properties with modern amenities continue to outperform, while older or functionally obsolete buildings face greater leasing challenges. The market isn’t moving uniformly, and understanding those differences has become increasingly important for owners, investors, and occupiers.”

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The Counselors of Real Estate® (CRE®) have released their highly anticipated 2026 Top Ten Issues Affecting Real Estate®, providing a clear view into the challenges and forces shaping the commercial real estate landscape. This year’s report reflects a market navigating massive structural changes—from technological disruption to demographic shifts, capital challenges, and a prolonged period of economic uncertainty.

About The Counselors of Real Estate® — and Martin’s Leadership Excellence

The Counselors of Real Estate® (CRE®) is one of the industry’s most respected global organizations, composed of fewer than 1,000 real estate professionals worldwide who have demonstrated exceptional expertise, integrity, and leadership. Membership is invitation-only and recognizes individuals whose insight and judgment elevate the profession as a whole.

At Martin Commercial Properties, we are proud that our President & CEO, Van W. Martin, holds this esteemed CRE® designation. His inclusion in this elite group reflects the strategic thinking, deep market understanding, and unwavering commitment to client success that define Martin’s approach to service. It’s one more way our leadership demonstrates the trusted guidance and forward-looking perspective that has shaped our 62-year legacy.

Below is a breakdown of the ten challenges shaping real estate decisions in 2026 and beyond.

1. Fiscal & Monetary Policy: Balancing Strength and Risk

Despite a staggering $37 trillion in national debt, the U.S. economy remains resilient. Job growth, consumer spending, and inflation have held up—yet elevated uncertainty, geopolitical risks, and delayed rate cuts continue to pressure real estate. With refinancing challenges and uneven sector performance, caution is warranted as the market adjusts to long-term fiscal and monetary headwinds.

2. Portfolio Risk: A New Era of Dynamic, Data-Driven Risk Management

Risk assessment has evolved far beyond the traditional annual review. Owners, lenders, and occupiers now face a complex landscape of infrastructure, climate, financial, and operational risks. With advanced analytics and real-time building data, risk management is becoming continuous and comprehensive—informing buy/sell decisions, capex planning, refinancing strategies, and tenant retention.

3. The Changing Nature of Real Estate: Back to the Fundamentals

The decades-long tailwind of cap rate compression has come to an end. Returns will depend on income performance—not financial engineering. Investors must refocus on fundamentals: strong underwriting, exceptional asset management, strategic leasing, and selecting the right building rather than the right sector. Operational discipline is now the key competitive advantage.

4. Capital Sources & Flows: Equity Is Scarce, Debt Remains Available

Transaction volume remains sluggish, trapping institutional equity in existing funds and limiting new capital. While the “gumming up” of equity flows presents short-term challenges, debt markets remain relatively liquid. Fundraising will require clearer value propositions, stronger strategies, and patience until valuations reset and liquidity returns.

5. Technology Transformation: AI Ushers in a Golden Age of CRE

AI is creating transformational efficiencies in underwriting, site selection, building operations, and decision-making. Data centers are booming as AI infrastructure expands, while property owners must secure data access and address cybersecurity vulnerabilities. With innovation moving at breakneck speed, CRE firms must adapt quickly—or risk being left behind.

6. The Future of Real Estate: Modern Thinking for a Data-Rich World

Real estate is entering a true golden age of data, computation, and analytics. Advances in AI, machine learning, and predictive tools are transforming how assets are valued, priced, and managed, enabling far more nuanced decision-making than in the past. To fully capitalize on these capabilities, real estate professionals must pair technology adoption with a shift in mindset—embracing modern statistical thinking, particularly Bayesian reasoning, to evaluate risk, update assumptions, and make disciplined decisions in an increasingly uncertain environment.

7. Global Chess: A Crisis of Confidence and Widespread Uncertainty

Unpredictable policy shifts, tariff volatility, declining transparency, and concerns about Federal Reserve independence are undermining economic stability and confidence. This environment of persistent volatility complicates long-term real estate decision-making on both the demand and capital sides. Even so, real estate’s inherent resilience—along with its long history of operating with imperfect information and relying on experienced judgment—positions the sector better than many asset classes to navigate prolonged uncertainty.

8. Housing Attainability: Friction Throughout the System

Housing affordability pressure now affects nearly every demographic group. Constraints such as restrictive zoning, high construction costs, and land scarcity have created deep-seated “stiction” across the housing ecosystem. Solutions to these challenges require incremental policy reform, public–private collaboration, and creative approaches at every step—from permitting to development to financing.

9. Pricing Risk: Debt Maturities Are Reshaping Value

With over $950 billion in loan maturities hitting annually through 2027, pricing risk is elevated. Distress is emerging gradually—not through a dramatic collapse but via slow workouts and selective discounts. As the bid–ask gap persists, holistic valuation methods are critical, incorporating access to infrastructure, resources, and workforce—not just physical assets.

10. Flow of People: Slowing Migration and Population Growth Change the Demand Map

Household formation, immigration, and domestic migration are all slowing, creating a more challenging environment for forecasting real estate demand. The once-booming Sun Belt is seeing plateaued inflows, while mobility is constrained by high mortgage rates and limited inventory. Developers must rethink assumptions about absorption, growth markets, and the “build it and they will come” model.

The post 2026 Top Ten Issues Impacting Real Estate® – The Counselors of Real Estate® first appeared on Martin Commercial.

The Greater Lansing industrial real estate market is off to a strong start in 2025, according to Chris Miller, Senior Vice President and Industrial / Investment Advisor at Martin Commercial Properties, in a recent interview with Michigan Business Beat.

Vacancy is down to 10.1%, with every submarket seeing positive absorption in the first half of the year. The West submarket is especially tight at just 1.6% vacancy, underscoring the growing need for new industrial space.

Key transactions included:

• Lanter Delivery Systems leasing 49,000 SF
• Priority Express leasing 33,000 SF

With demand outpacing available inventory, speculative development is beginning to take shape—positioning Greater Lansing to capture continued growth. Large-scale projects like the Ultium Cells battery plant and Neogen’s research campus are also fueling long-term momentum for the region’s industrial economy.

Watch the full interview here:

How Can You Benefit from Lansing’s Industrial Growth?

With vacancies at historic lows and demand continuing to outpace supply, Lansing’s industrial market is creating both challenges and opportunities. Tenants face increasing competition for space, while landlords and investors are seeing strong leasing activity and the potential for new development. For those considering expansion, relocation, or investment, timing and strategy are critical in this fast-moving sector.

At Martin Commercial Properties, our industrial advisors bring decades of experience helping tenants, landlords, and investors navigate Lansing’s evolving industrial landscape. Whether you’re evaluating space needs, weighing build-to-suit opportunities, or exploring investment options, our team can help position you for success.

The post Lansing’s Industrial Sector Shows Strong Momentum in 2025 first appeared on Martin Commercial.

In the first half of 2025, Greater Lansing’s office real estate market demonstrated encouraging signs of balance and resilience. During a recent episode of Michigan Business Beat, Eric Rosekrans, CCIM, CPM (Executive Vice President) and Tom Jamieson, SIOR (Senior Vice President, Office Advisor) joined Chris Holman to dissect the latest trends shaping office space dynamics.

Key Highlights:

• Vacancy Holds Steady at 22.4%
  Market-wide vacancy remained unchanged at 22.4%, as modest gains in the East, North, South, and West submarkets successfully offset larger departures in the central business district (CBD).
• Absorption Nears Neutral
  Overall net absorption was nearly flat, clocking in at approximately –1,088 SF, indicating stabilization rather than sharp decline.
• Notable Lease Activity
  Key lease renewals and expansions included Deloitte with approximately 25,000 SF, and Spicer Group at around 16,000 SF—demonstrating sustained interest from established tenants.
• Flexibility Is Paramount
  With hybrid and remote work models firmly entrenched, landlords are adapting with more flexible lease terms—shorter commitments and tailored spaces—to retain tenants and attract new prospects. These shifts are reshaping how both tenants and investors approach office space. Network

Why It Matters:

• Emerging Stability: A steady vacancy rate and neutral absorption suggest that Lansing’s office market is heading toward equilibrium—even amid shifting work norms.
• Tenant-Centric Evolution: By offering flexibility and smaller footprints, landlords are aligning better with today’s evolving tenant needs.
• Investor Caution and Strategy: As the market rebalances, repositioning and risk assessment become increasingly critical for office investors.

? Watch the full interview here:

Is the Office Market Shift an Opportunity for You?

For some businesses and investors, Lansing’s stabilizing office market offers reassurance and renewed potential. For others, it highlights the need to adapt—whether that means rethinking space needs, renegotiating lease terms, or exploring new investment strategies.

At Martin Commercial Properties, our office advisors have decades of experience helping tenants, landlords, and investors navigate changing market dynamics. If you’re evaluating your options in this evolving landscape, our team can guide you toward strategies aligned with your goals.

The post Is Lansing’s Office Sector Stabilizing? first appeared on Martin Commercial.

The first half of 2025 brought encouraging momentum to the Greater Lansing retail real estate market, according to insights from Carson Patten and Samantha Le of Martin Commercial Properties, who recently joined the Michigan Business Beat.

Vacancy improved to 17.9%, with absorption trending upward compared to late 2024. While the national market has seen continued closures from big-box and specialty retailers, Lansing has demonstrated resilience—quickly backfilling vacated spaces with new tenants.

Recent highlights include:

• Ashley Furniture signing a 95,000 SF lease at Meridian Mall
• New arrivals such as Barnes & Noble, Shake Shack, Wingstop, Smoothie King, and Dollar Tree
• Ongoing redevelopment projects like Delta Crossings, which continues to reshape West Lansing’s retail corridor

The trend toward experience-driven retail, dining, and fitness tenants is also driving renewed consumer engagement and repositioning opportunities for aging centers.

Watch the full interview here:

Is the Retail Market Recovery an Opportunity for You?

Lansing’s retail market is showing fresh momentum in 2025, with national brands expanding locally and redevelopment projects fueling new activity. For tenants, this means greater choice in high-traffic locations. For landlords, it signals renewed leasing potential and repositioning opportunities. And for investors, the sector’s resilience offers a chance to reenter the market with confidence.

At Martin Commercial Properties, our retail advisors specialize in guiding tenants, landlords, and investors through shifting retail dynamics. Whether you’re looking to secure space, lease vacancies, or identify your next investment, our team can help you capitalize on the opportunities emerging in Greater Lansing’s retail landscape.

The post Lansing’s Retail Market Showing Signs of Recovery in 2025 first appeared on Martin Commercial.

Despite national retail headwinds, Greater Lansing’s retail market demonstrated strength in H1 2025, with slight improvements in vacancy and absorption.

Retail vacancy dipped to 17.9%, while absorption improved to -6,449 SF, recovering from a sharper decline in late 2024. The East Submarket continues to lead the region, with strong lease-up activity following national chain closures.

Key highlights:

• Notable closures: Jo-Ann, Party City, Big Lots, Rite Aid
• Fast backfills: Dollar Tree, Barnes & Noble, Shake Shack, Wingstop, Smoothie King
• Ashley Furniture signed for 95,000 SF in Meridian Mall (East Submarket)
• Dining and fitness concepts dominate new tenant entries across all submarkets
• Redevelopment strategies are unlocking value in vintage centers
• Delta Crossings remains a regional growth hub with major new construction underway

? With experiential retail, restaurant growth, and adaptive reuse on the rise, the local retail sector is finding new ways to thrive despite national shakeups.

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Read the full report here

The post H1 2025 Lansing Retail Market: Closures Create New Opportunities in a Resilient Landscape first appeared on Martin Commercial.

Greater Lansing’s office market showed signs of stabilization in H1 2025, as vacancy held at 22.4% and net absorption was nearly flat.

While move-outs in the CBD dragged down performance, other submarkets—including East Lansing, North, and West—recorded modest positive absorption. Employers continue to fine-tune hybrid work policies, creating steady demand for smaller, flexible office spaces and short-term lease options.

Key highlights:

• Absorption: -1,088 SF (a notable improvement from -64,140 SF in H2 2024)
• Largest leases: Deloitte (25,000 SF), Michigan Beer & Wine Wholesalers (11,000 SF), Spicer Group (16,000 SF)
• No new construction amid high rates and cautious demand
• Landlords remain competitive with concessions and flexibility on lease terms
• Hybrid work has stabilized, with some employers increasing in-office expectations

The office sector’s recovery is proceeding at an uneven but steady pace, shaped by evolving workplace strategies and growing demand for agile space solutions.

Read the full report here

The post H1 2025 Office Market: Stabilization and Flexibility Define the First Half of the Year first appeared on Martin Commercial.

The Greater Lansing industrial sector tightened significantly in the first half of 2025, signaling continued strength despite limited new construction.

Industrial vacancy dropped to 10.1%, down from 11.0% in late 2024. Positive absorption reached 129,730 SF, with all submarkets posting gains. The West Submarket continues to lead the region, boasting a remarkably low 1.6% vacancy rate—fueled by demand from logistics, advanced manufacturing, and medical technology users.

Key highlights:

• Major leases: Lanter Delivery Systems (49,000 SF), Priority Express (33,000 SF), Bay Logistics (26,000 SF), Herc Rentals (18,000 SF)
• Notable investments: $2.6B Ultium Cells battery plant, $208M Neogen research & manufacturing facility
• Strong investment activity with key asset sales across South, East, and West Submarkets
• Speculative construction planned in response to lack of quality inventory
• The One Big Beautiful Bill Act is expected to further accelerate activity with new tax incentives and deregulation

? With infrastructure improvements, strategic land availability, and a growing base of advanced industries, Greater Lansing is well positioned for continued industrial growth.

Read the full report here

The post H1 2025 Industrial Market: Vacancy Shrinks, Investment Surges in Greater Lansing first appeared on Martin Commercial.

Current Market Headwinds in CRE

• Labor and material costs remain elevated, affecting both new development and renovation projects. Delays and unpredictability in supply chains continue to stall delivery timelines.
• Workplace Strategy Evolution: The hybrid work model is here to stay. Companies are still defining their ideal work setups, which influences how much and what kind of office space they need.
• Rising Cap Rates: Higher capitalization rates are leading to declining asset values, putting downward pressure on investment appeal.
• Interest Rates & Borrowing Costs: Despite expectations, the Fed has held interest rates steady in 2025. This keeps borrowing costs high, impacting deal flow and development activity.
• Insurance Premium Spikes: Property insurance has increased up to 3x from just a few years ago. This shift has direct consequences on clauses in purchase agreements and risk management strategies.
• Recession Fears: Although the U.S. economy has avoided a full-blown recession, uncertainty persists. It’s influencing everything from investor behavior to tenant decisions.

From lease rollover issues to AI-driven disruption, high vacancy concerns, and refinancing risks, the ripple effects are significant across all asset types.

Signs of Stabilization

Despite the challenges, signs of recovery are emerging. Trophy assets in major markets like Manhattan are seeing over 90% physical occupancy. Office attendance is up, and the sector has posted three consecutive quarters of positive absorption—a strong signal that demand is stabilizing.

Flight to Quality and Right-Sizing Strategies

Tenants are optimizing their footprints while upgrading their environments. It’s a dual trend: reduce total space while increasing the quality and amenities of the space they occupy.

Key Local Examples:

• Michigan Beer and Wine downsized to 11,500 sq ft in a modern CBD facility.
• Independent Bank moved from 18,000 sq ft to 10,000 sq ft.
• Aetna relocated from a 30,000 sq ft suburban office to just 9,500 sq ft in a more strategic location.

Tenants are investing in high-amenity buildings, even if they pay more per square foot. The outcome is a flight to quality with right-sizing of space.

Owner-Occupier Market: Property Values Under Pressure

CRE values are under scrutiny in 2025. Even high-profile buildings are seeing massive devaluations:

These are not distressed buildings—they’re facing the hard math of a new economic reality.

What Lies Ahead for CRE

The CRE sector is in a period of redefinition. The shift from panic to planning is underway. Companies are developing real estate strategies that align with workforce evolution, economic constraints, and long-term goals.

Whether you’re a landlord, tenant, developer, or investor, success in 2025 hinges on flexibility and forward thinking. Yesterday’s benchmarks don’t define tomorrow’s opportunities.

Stay tuned as we continue tracking these shifts and supporting your commercial real estate strategy with data-driven insight and boots-on-the-ground expertise.

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Van W. Martin CCIM, SIOR, CRE Holds Prestigious CRE® Designation

Van W. Martin, President and CEO of Martin Commercial Properties, holds the prestigious Counselor of Real Estate® designation, a mark of distinction reserved for only the most accomplished real estate professionals. As one of fewer than 1,000 Counselors of Real Estate® worldwide, Martin exemplifies a deep commitment to delivering exceptional insights and innovative solutions to clients.

Mr. Martin is 1 of only 74 commercial real estate professionals with both CRE and SIOR designations in the nation.

Contact Us

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The post Navigating Commercial Real Estate in 2025: Challenges, Stabilization, and Strategic Shifts first appeared on Martin Commercial.