Commercial Real Estate State of the Market
Tennessee, Virginia, North Carolina, South Carolina, Georgia, and Florida
White Paper
March 2026
Market Overview
Commercial real estate across Tennessee, Virginia, North Carolina, South Carolina, Georgia, and Florida remains one of the more attractive regional investment stories in the United States, but the market has become more selective. The Southeast still benefits from population growth, business migration, port and logistics infrastructure, and comparatively favorable long-term demographic trends. Even so, the pace of growth has normalized. The U.S. Census Bureau reported that the South remained the fastest-growing region between July 2024 and July 2025, but its growth rate slowed to 0.9%, down from 1.4% in the prior annual period. At the same time, CBRE's 2026 national outlook projects U.S. gross domestic product growth of 2.0% with inflation averaging 2.5%, a backdrop that supports continued leasing and investment activity without suggesting a broad-based surge in valuations (CBRE, 2026m; U.S. Census Bureau, 2026).
Capital Markets and Credit Conditions
Capital markets are improving, although they remain disciplined. The Mortgage Bankers Association forecast total commercial mortgage originations of approximately $805 billion in 2026, up 27% from 2025, indicating better liquidity and more execution certainty for acquisitions, refinancings, and recapitalizations. CBRE's broader 2026 outlook is similarly constructive, anticipating better transaction conditions as financing markets stabilize. However, this recovery is occurring alongside persistent stress in weaker office assets. Trepp reported that the office CMBS delinquency rate reached 12.34% in January 2026, an all-time high, reinforcing that the capital recovery is uneven and still highly asset-specific (CBRE, 2026m; Mortgage Bankers Association, 2026; Trepp, 2026).
Sector Fundamentals
Office remains the most bifurcated property type in the region. Nationally, CBRE reports that office demand is recovering slowly, leasing activity is approaching pre-pandemic levels, and occupiers continue to prefer high-quality, flexible, and amenitized buildings. That pattern is visible across the target states. Nashville ended 2025 with nearly 939,000 square feet of annual absorption, Northern Virginia recorded its first annual occupancy gain since 2019, Richmond posted a sixth consecutive quarter of positive absorption, Charlotte's Class A vacancy improved on stronger prime-asset demand, and Tampa recorded 840,000 square feet of annual absorption. Miami remained mixed but comparatively resilient, with stronger suburban rent performance and positive year-to-date central business district absorption despite a weaker fourth quarter (CBRE, 2026h; CBRE, 2026i; CBRE, 2025b; CBRE, 2025c; CBRE, 2026e; CBRE, 2026f; CBRE, 2026k).
Industrial continues to offer the region's strongest large-scale operating fundamentals, although it has normalized from the post-pandemic boom. CBRE's national industrial figures show a 6.7% U.S. vacancy rate at year-end 2025 and a 12.7% decline in space under construction, suggesting that the supply shock is easing. Several markets in the focus states remain stronger than the national average. Nashville ended 2025 with 4.2% vacancy, Northern Virginia with 3.7%, and Charlotte with 9.5 million square feet of annual absorption. Atlanta closed the year with 17.3 million square feet of fourth-quarter leasing, while Charleston still generated positive absorption despite higher vacancy from new deliveries. The common theme is that quality modern product, especially in logistics-oriented submarkets, continues to lease, while commodity space is more sensitive to pricing and location (CBRE, 2026b; CBRE, 2026c; CBRE, 2026d; CBRE, 2026g; CBRE, 2026l; CBRE, 2025a).
Multifamily is the sector most affected by oversupply in portions of the Southeast. The National Association of REALTORS® reported that renter demand remained solid entering 2026, but vacancies stayed elevated and rent growth remained subdued because deliveries continued to outpace absorption. The forward view is more constructive than the near-term operating data. NAIOP noted that multifamily starts are down sharply from their peak and that units under construction have fallen materially, which should support a healthier supply-demand balance over the next 12 to 24 months. CBRE likewise expects Southeastern markets to outperform over the longer term because of job growth and in-migration, even if near-term revenue growth remains muted in heavier-supply metros. Retail, by contrast, remains comparatively healthy; CBRE expects space availability to stay near historic lows in 2026 because new construction remains constrained (CBRE, 2026n; CBRE, 2026p; National Association of REALTORS®, 2026; NAIOP, 2026).
State-Level Implications
At the state level, the opportunity set is favorable but differentiated. Tennessee and North Carolina appear well positioned for balanced office and industrial performance, led by Nashville and Charlotte. Virginia offers one of the more defensible combinations of improving office fundamentals and very tight industrial conditions, especially in Northern Virginia. South Carolina remains a manufacturing- and port-driven industrial story, particularly in Charleston and the broader Upstate. Georgia continues to anchor regional liquidity through Atlanta's scale and leasing depth, while Florida offers some of the strongest long-term demand drivers but also carries greater sensitivity to insurance and operating-cost volatility in coastal markets. Investor intent data reinforce this positioning: Atlanta ranked second among U.S. target metros for 2026, Charlotte ranked fifth, and both Nashville and Tampa placed in the top 10 in CBRE's 2026 investor survey and related market releases (CBRE, 2026a; CBRE, 2026j).
Twelve- to Twenty-Four-Month Outlook
The most likely path over the next 12 to 24 months is a continued improvement in transaction volume, better refinancing execution, and selective cap rate compression for industrial, multifamily, and necessity-based retail assets, assuming interest-rate volatility remains contained. Office should continue to split into two markets: prime, well-located assets in growth corridors should lease and finance better, while commodity office and older buildings remain the most probable source of discounted sales, recapitalizations, and distress. Investors in this region should underwrite carefully around insurance, capital expenditures, tenant credit, and maturity schedules rather than assume broad regional appreciation. The Southeast remains one of the best long-term U.S. commercial real estate geographies, but outperformance over the next cycle is more likely to come from submarket selection, lease durability, and basis discipline than from momentum alone (CBRE, 2026m; Mortgage Bankers Association, 2026; NAIOP, 2026; Trepp, 2026).
References
CBRE. (2026a, January 29). 2026 North American investor intentions survey. https://www.cbre.com/insights/reports/2026-north-american-investor-intentions-survey
CBRE. (2026b, January 16). Atlanta industrial figures report Q4 2025. https://www.cbre.com/insights/figures/atlanta-industrial-figures-report-q4-2025
CBRE. (2026c, January 13). Charleston industrial figures Q4 2025. https://www.cbre.com/insights/figures/charleston-industrial-figures-q4-2025
CBRE. (2026d, January 16). Charlotte industrial figures Q4 2025. https://www.cbre.com/insights/figures/charlotte-industrial-figures-q4-2025
CBRE. (2026e, January 16). Charlotte office figures Q4 2025. https://www.cbre.com/insights/figures/charlotte-office-figures-q4-2025
CBRE. (2026f, January 9). Miami office figures - Q4 2025. https://www.cbre.com/insights/figures/miami-office-figures-q4-2025
CBRE. (2026g, January 16). Nashville industrial figures report Q4 2025. https://www.cbre.com/insights/figures/nashville-industrial-figures-report-q4-2025
CBRE. (2026h, January 16). Nashville office figures report Q4 2025. https://www.cbre.com/insights/figures/nashville-office-figures-report-q4-2025
CBRE. (2026i, January 20). Office rent growth accelerates as gateway market rebound continues: Q4 2025 U.S. office figures. https://www.cbre.com/insights/figures/q4-2025-us-office-figures
CBRE. (2026j, January 29). Tampa among top targets for commercial real estate investment in 2026, CBRE survey finds. https://www.cbre.com/press-releases/tampa-among-top-targets-for-commercial-real-estate-investment-in-2026-cbre-survey-finds
CBRE. (2026k, January 13). Tampa office figures - Q4 2025. https://www.cbre.com/insights/figures/tampa-office-figures-q4-2025
CBRE. (2026l, January 21). Q4 2025 U.S. industrial and logistics figures. https://www.cbre.com/insights/figures/q4-2025-us-industrial-and-logistics-figures
CBRE. (2026m, January 14). U.S. real estate market outlook 2026. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026
CBRE. (2026n, January 14). U.S. real estate market outlook 2026: Multifamily. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/multifamily
CBRE. (2026o, January 14). U.S. real estate market outlook 2026: Office. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/office
CBRE. (2026p, January 14). U.S. real estate market outlook 2026: Retail. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/retail
CBRE. (2025a, December 30). Northern Virginia industrial figures Q4 2025. https://www.cbre.com/insights/figures/northern-virginia-industrial-figures-q4-2025
CBRE. (2025b, December 30). Northern Virginia office figures Q4 2025. https://www.cbre.com/insights/figures/northern-virginia-office-figures-q4-2025
CBRE. (2025c, December 30). Richmond office figures Q4 2025. https://www.cbre.com/insights/figures/richmond-office-figures-q4-2025
Mortgage Bankers Association. (2026, February 9). MBA CREF forecast: Total commercial mortgage originations to increase 27 percent to $805 billion in 2026. https://www.mba.org/news-and-research/newsroom/news/2026/02/09/mba-cref-forecast--total-commercial-mortgage-originations-to-increase-27-percent-to--805-billion-in-2026
NAIOP. (2026, January 26). A measured optimism: Economic and commercial real estate outlook for 2026. https://blog.naiop.org/2026/01/a-measured-optimism-economic-and-commercial-real-estate-outlook-for-2026/
National Association of REALTORS®. (2026, January). January 2026 commercial real estate market insights. https://www.nar.realtor/commercial-real-estate-market-insights/january-2026-commercial-real-estate-market-insights
Trepp. (2026, February 19). Office CMBS delinquency hits an all-time high: What the data is really saying. https://www.trepp.com/trepptalk/office-cmbs-delinquency-hits-an-all-time-high-what-the-data-is-really-saying
U.S. Census Bureau. (2026, January 27). Population growth slows due to decline in net international migration. https://www.census.gov/newsroom/press-releases/2026/population-growth-slows.html
