U.S. Midterms 2026: Implications for Commercial Real Estate
• The 2026 U.S. midterm elections have resulted in a divided government, with Democrats controlling Congress and Republicans holding the White House. According to Cushman & Wakefield, this political shift is unlikely to directly impact commercial real estate (CRE) markets. Instead, broader economic factors such as inflation, interest rates, and GDP growth will play a more significant role. The Federal Reserve is expected to raise interest rates by 25 basis points in December 2026, with long-term rates stabilizing between 4.5% and 5.0% through
• Meanwhile, geopolitical tensions, particularly the ongoing Iran conflict, continue to influence energy prices and inflation, adding uncertainty to the economic outlook.
Impact & Risks
The divided government may lead to fiscal policy stability but could also result in periodic market volatility due to potential debt-limit standoffs and government shutdowns. Investors and occupiers in the CRE sector may face challenges from elevated interest rates, inflation, and energy costs. Data centers, in particular, could see increased scrutiny over AI regulation and environmental impacts. However, constrained new supply and steady economic growth are expected to support stable or improving occupancy rates across property types.
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