The commercial real estate landscape across the Midwest and Southeast is showing signs of activity as investors emerge from post-election uncertainty and adapt to persistent interest rate challenges. Market participants are reporting increased deal flow and a greater willingness among buyers and sellers to find common ground after months of cautious positioning.
Jaidyn Smith, Senior Advisor at Legacy Real Estate Advisors, has witnessed this shift firsthand across her national retail and commercial portfolio. With five years specializing in grocery-anchored shopping centers, QSR properties, and retail developments from Michigan to Florida, Smith reports a notable increase in market activity following a period of widespread hesitation.
“I’m a lot busier than I was last year, for sure, and honestly, I’m having a great year,” Smith notes. “I feel like people are kind of getting off their high horse, and they’re just starting to do something and move all across the board in all sectors, whether it’s leasing, building, or acquiring.”
The commercial real estate sector experienced significant hesitation throughout much of 2024, with many investors adopting a wait-and-see approach ahead of the presidential election and potential interest rate changes. Smith observed this pattern directly in her client interactions.
“I’ve seen a lot more people stand on the sidelines, especially before the election, before January,” she explains. “I was told, ‘Okay, we’re going to stay on the sidelines. We want to see what happens after the election. We want to see what happens after these interest rates fall.'”
However, the post-election period has brought renewed momentum. Smith reports that buyers and sellers are demonstrating increased flexibility in negotiations, leading to more successful closings. “I feel like the buyers and sellers are having a little bit more meeting of the minds than we have the past year and a half, and I feel like more deals are getting done this quarter.”
Among the markets Smith covers, Detroit stands out as experiencing particularly strong growth and investment activity. The city’s transformation, led by significant private investment, represents one of the most compelling urban renewal stories in the commercial real estate sector.
“Detroit, for sure, I am born and raised in Detroit. There’s so much happening,” Smith emphasizes. “Dan Gilbert just took over the entire city. He owns like 180 properties across Detroit.”
Recent major developments include the completion of the $181 million Hudson’s project, a mixed-use entertainment, retail, and office complex in downtown Detroit. A new $121 million hotel addition has recently opened, further enhancing the area’s commercial appeal.
The investment activity extends beyond single projects to comprehensive urban development. Bedrock, one of Detroit’s largest real estate companies, continues expanding multi-family developments throughout the city. The Little Caesars Arena serves as an anchor for entertainment and sports activities, hosting Detroit Pistons games and major concerts.
“I believe the city is coming back, and there’s just so much growth there, more than I’ve ever seen before,” Smith observes.
While Detroit captures attention for its dramatic transformation, Florida markets continue showing steady growth despite facing challenges from insurance costs and hurricane-related concerns. Smith’s Florida portfolio spans multiple regions, with particular strength in Orlando, Kissimmee, Broward, and Miami-Dade counties.
Port St. Lucie has emerged as a particularly active market, driven by new residential development and migration patterns. “A lot of new homes. I want to go visit a client of mine. There’s a 1200 single family home project that is being built on a golf course right now,” Smith notes. “A lot of my clientele across the country, and especially New Yorkers, are getting places down there.”
The Orlando and Kissimmee markets benefit from proximity to Disney World and the broader tourism economy. Despite broader economic uncertainties, Smith works with a large multi-family developer in the region who maintains consistent construction activity. “They’re constantly building 100 plus units. They never slow down. They’re constantly picking up.”
Jacksonville, previously experiencing stagnation, shows signs of recovery as developers find creative solutions for vacant retail spaces. Smith cites an example of adaptive reuse where a former big-box retail space was converted into a pickleball arena, demonstrating the market’s evolution toward experiential and recreational uses.
The retail commercial real estate sector continues adapting as traditional anchor tenants face challenges and developers seek innovative solutions. Smith’s experience with grocery-anchored shopping centers provides insight into how the sector is responding to changing consumer patterns and tenant needs.
A recent nine-and-a-half-month transaction in Ohio exemplifies the complexity of modern retail deals. The shopping plaza transaction required multiple contract renegotiations, a 10-year lease extension from anchor tenant Giant Eagle, space reconfigurations, and extensive parking lot improvements.
“There’s a lot of vacancies, a lot of tenants that are turning over, but there’s also a lot of development happening, depending on where you go,” Smith explains regarding Ohio’s retail market conditions.
The geographic variation within states proves significant. While inner-city areas of Cincinnati and Columbus show increased activity, smaller markets like Canton face different challenges. Smith’s recent sale of a shopping center in Canton involved what she describes as “probably one of the main retail centers and the main retail corridor within that city.”
Despite increased market activity, fundamental challenges persist in the commercial real estate sector. Interest rates and construction costs remain primary concerns for developers and investors across all property types.
“The interest rates have been a factor, obviously. I mean, I’m hoping and praying they come down,” Smith states. “The construction costs with the interest rates and construction costs, it’s just a lot harder.”
These economic pressures have influenced project timing and investment strategies. However, Smith suggests that market participants are increasingly willing to proceed with transactions despite less-than-ideal financing conditions, indicating a shift from the prolonged waiting period that characterized much of 2024.
The combination of post-election clarity, adaptive strategies for challenging properties, and renewed investor confidence suggests continued momentum in commercial real estate markets. Smith’s experience across multiple geographic markets and property types provides a broad perspective on sector trends.
The success stories emerging from Detroit’s transformation, Florida’s continued growth despite challenges, and the creative solutions being implemented in traditional retail markets demonstrate the sector’s resilience and adaptability.
For commercial real estate professionals and investors, the current environment presents opportunities for those willing to navigate interest rate challenges and adapt to evolving market conditions. The increased willingness of buyers and sellers to negotiate, combined with innovative approaches to property development and adaptive reuse, suggests a maturing market finding its footing in a new economic reality.
As Smith’s experience demonstrates, success in today’s commercial real estate market requires geographic diversification, sector expertise, and the flexibility to work through complex transactions that may require multiple renegotiations and creative solutions. The professionals who can navigate these challenges while maintaining strong client relationships are positioned to benefit from the market’s gradual recovery and continued evolution.
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