Leaders in the commercial real estate sector believe 2026 will be a year of growth, with robust industrial activity as well as increased new construction and the continuing trend of large tenants investing in their properties.

Those leaders also are watching redevelopment of sites such as Valley West Mall, Merle Hay Mall and civic buildings along the city’s riverfront.

The Business Record asked Adam Kaduce, president of R&R Real Estate Advisors; Justin Lossner, senior managing director at JLL; Alec Wilcox, vice president of Cushman & Wakefield Iowa Commercial Advisors; Ajay Kalra, managing director of CBRE; Carrie Kruse, economic development administrator for the city of Des Moines; and Chris Murray, president and CEO of the Denny Elwell Co., to share their thoughts about what 2026 might bring. 

Here are their responses, which have been lightly edited for clarity and brevity.

What opportunities in the commercial sector are you closely watching in 2026?

Wilcox: 2026 should be an exciting year for commercial real estate in Des Moines. The asset class I am tracking closely is industrial, and particularly the sub-type of Industrial Outside Storage (IOS). Within the last year, industrial real estate activity in general was lighter relative to the boom we saw immediately post-COVID. The exception to this trend is within the industrial real estate sub-type of Industrial Outside Storage. This sub-type includes any industrial site that has excess ground where users can store product or equipment outside. Leasing and sales activity was quite robust in 2025, and I am anticipating more of the same in 2026. Traditionally, most of the IOS sites have been owned by users, but we have seen an uptick in investors purchasing or putting up for lease IOS opportunities. I am anticipating robust investor-driven activity in the IOS space in 2026.

Kaduce: Two areas stand out as we look ahead to 2026. The first is the continued redevelopment along the University Avenue and Westown Parkway corridor, including Valley West Mall and the Urban Loop. This area is home to many long-time West Des Moines businesses and has significant untapped potential. Its central, midtown location offers exceptional accessibility, and there is a strong inventory of high-quality commercial real estate that represents good long-term value. With our office developments in the area, the businesses we work with are energized by the momentum and excited to be part of the next chapter for this corridor in 2026. The second area is the Urban Loop in Urbandale, where development activity continues to build. The new Des Moines Christian campus will be a major catalyst, and we’re already seeing businesses choose the Meredith Drive corridor in anticipation of that growth. With its proximity and easy access to all parts of Central Iowa and additional retail development underway, we expect several exciting announcements in this area as we move into 2026.

Lossner: We believe vacant or near-vacant office building sales will slow in 2026 as the focus will turn to leasing and stabilization of recently traded assets. This year we saw an uptick in large tenants coming off the sidelines to make long-term decisions, invest in their space and we expect that trend to continue in 2026. Look for major updates to occur in many of the recently traded assets.

Kalra: New construction. Many leading indicators would suggest 2026 to be a year of growth versus the last few years of weathering the storm, with the hope that demand (flight to quality) can catch up with the lack of new supply.

Kruse: With a new year beginning, we’re closely watching several opportunities across Des Moines’ commercial sector that reflect continued momentum and reinvestment. The Pro Iowa Soccer Stadium project and the Merle Hay Mall arena project stand out as transformative developments with the potential to spur surrounding commercial activity and generate long-term economic impact. We’re also encouraged to see development planning for the Market District getting underway, pointing to new opportunities for mixed-use growth and neighborhood-serving businesses. The upcoming completion of the Financial Center office-to-housing conversion is another important milestone, opening the door for new ground-floor commercial amenities that can further activate downtown streets and support continued residential growth in our downtown. We are excited to have recently announced the selection of a developer for the Cherry Street parking lot development that is currently owned by Polk County, and look forward to the opportunities that we have to redefine the future use for several historic civic buildings throughout downtown: the city’s Armory building, historic City Hall and the Federal Historic Courthouse building. Together, these projects highlight meaningful opportunities to strengthen Des Moines’ downtown core while thoughtfully reimagining existing assets in our major employment centers.

Murray: The commercial real estate market in Iowa appears to align in most segments with continued cautious optimism. The office sector from both a redevelopment and relocation standpoint likely will be active as companies look to continue to right size their square footage and amenity needs. Public-private partnerships, TIF, tax abatement and the ability for cities and developers to work closely together to minimize roadblocks, improve speed to market and reduce overall development costs while maintaining smart growth will help determine this year’s winners.       

What factors will influence and shape the market in the coming months?

Wilcox: Land availability is and will continue to be a significant market influencer in the IOS space. In addition, as the Des Moines metro continues to grow outward the land that is zoned to allow outside storage continues to be rezoned into light industrial or other zoning classes that don’t allow it.

Kaduce: Job growth remains one of the most important indicators we are watching, particularly announcements related to hiring, layoffs and relocations. While 2025 brought some turbulence in the form of isolated layoffs and corporate moves, those impacts have remained relatively contained. Overall, business confidence has proven resilient and remains strong as we enter 2026, which is encouraging for the commercial office market. On the development side, construction costs are a key focus. For the first time in several years, we are seeing material and labor costs plateau. That stabilization is a welcome signal and is opening the door to revisit development projects that were previously sidelined. It also suggests improved availability among trade partners and a more normalized supply chain, both of which support healthier development activity moving forward.

Lossner: Emerging relief in interest rates, stability in construction pricing all fueled by better clarity around occupancy strategy will continue to build confidence in the occupier market and broaden activity in the second generation office market both downtown and in the suburbs.

Kalra: It will be interesting to see how the administration’s tax adjustments and changes play out from the Big Beautiful Bill, both at the consumer level and with owners and developers. Consumers are expected to receive record tax refunds, and in turn, withholding levels adjusted to reflect additional take-home pay. This should help create a more confident economic environment. Owners and developers also benefit from the return of bonus depreciation through 2029 to help expense property improvements, and the anticipation is more rate cuts will take place in 2026, which will help stabilize cap rates and lower the cost of capital, and provide support to the abundance of loans coming due needing to be refinanced, or promoting owners to sell. 

Kruse: Several factors are expected to shape the real estate market in the coming months. Elevated office vacancy rates and evolving tenant preferences continue to influence leasing activity, while ongoing adaptive reuse and redevelopment efforts present opportunities to reposition some existing office assets. Continued uncertainty around interest rates and financing costs remains a key consideration for developers, investors and lenders as projects move from planning into execution. Broader economic factors, including tariffs and trade policy, are also being closely monitored for their potential impacts on construction costs, material pricing and supply chains. At the same time, sustained building permit activity reflects ongoing confidence in the Des Moines market, and the growing pipeline of new housing units coming online will influence both residential absorption and future commercial demand.

Murray: Iowa commercial real estate in 2026 will be defined by innovation, adaptation and awareness. Successful projects and investors are going to be the ones who can stay ahead of market trends and prioritize fundamentals such as cash flow, risk management and diversification. Property tax reform, employment trends, consumer confidence and tariffs will continue to help shape the Iowa market in coming months. 

What are you most excited about for the market in 2026?

Wilcox: We are tracking several new projects that incorporate IOS like we haven’t seen in a long time. A majority of the IOS product in the metro features buildings constructed prior to the turn of the century. Those buildings were not constructed with today’s users’ needs in mind, so this newer product will be able to satisfy a need within the IOS space in Des Moines.

Kaduce: What’s most exciting is the level of confidence we’re seeing from the businesses we work with. Many are planning for hiring and expansion in 2026, which naturally creates momentum in the commercial market. We’re also seeing a return to longer-term decision-making, with companies making thoughtful investments in their physical space. Tenants are being more intentional about the environments they bring their teams into each day and are increasingly upgrading to higher quality office spaces. That trend is encouraging for Central Iowa and will be critical in helping reduce office vacancy rates while creating workplaces that better support collaboration, culture and growth.

Lossner: Our team is excited to see strong activity in buildings we are familiar with but may now look different as landlords invest and get creative with new amenity packages presenting great opportunities for prospective tenants in the market. We are also excited to never say the words “return to office” again. 

Kalra: The collaborative and resilient approach our community leaders have taken to prioritize the revitalization of downtown. We have momentum with many great initiatives, including the soccer stadium and continued growth surrounding Gray’s Landing, 515 Walnut Tower, the Market District, the armory and federal courthouse redevelopments, and the repurposing of the Nationwide building with American Equity moving in all come to mind. We have a great balance of new and existing players entering our market to push us to think strategically. I’m grateful for the opportunity to chair the Downtown Economic Development Council with the Greater Des Moines Partnership this upcoming year and build on that momentum.

Kruse: I’m most excited to see several key visions and opportunities take shape across Des Moines. Establishing a clear plan for the future use of our historic City Hall building will be a milestone, preserving and reimagining one of the city’s most iconic assets. I’m also eager to see what development opportunities emerge for the vacant parking lots along MLK Parkway, with the potential to transform these spaces into vibrant, mixed-use destinations. The Market District and the Blood Center block offer further opportunities to drive new activity, strengthen downtown neighborhoods and create meaningful commercial and residential growth. At the same time, continued progress on major legacy projects like the Pro Iowa Soccer Stadium and the Merle Hay Mall arena will remain important catalysts for economic development and community engagement. We’re also enthusiastic about the industrial market in 2026, where increasing demand and limited new supply are creating opportunities for strategic growth. 

Murray: Artificial intelligence and the integration of property technology enhancing operational efficiency and marketing strategies is one exciting thing that is helping our slow-to-change industry and 2026 appears it could be a breakout year. From a project standpoint, my top three are: the evolution of the Valley West Mall redevelopment in West Des Moines;  the ongoing developments in downtown Des Moines including the soccer stadium progress; and of course the growth in Ankeny both with the expansion of Metro North Business Park and north of Costco at 36th Street with the most recent annexation expanding the city’s northern border with plans for infrastructure to begin in 2026.