JLL’s updated mid-year Global Real Estate Outlook finds that the relatively upbeat expectations set in late 2025 have been tempered by new macro shocks. The firm now anticipates slower growth, higher inflation and a different path for interest rates than initially forecast, driven in part by conflict in the Middle East, the closure of the Strait of Hormuz and persistent trade tensions.
Despite the change in near-term conditions, JLL maintains that six structural forces continue to guide global commercial real estate markets, beginning with a sharper focus on cost management. Energy, commodity and freight disruptions have pushed cost control from a standard discipline to a core strategic driver, as higher fuel, materials and logistics expenses weigh on operating budgets, push up construction and fit-out costs, and delay project timelines. While the tools to manage these pressures remain broadly the same, the urgency and intensity of their application have increased.
Supply constraints are also reshaping opportunities. With development pipelines already shrinking in many mature sectors, rising construction costs and uncertainty around project viability could further limit new starts. In that context, JLL expects well-located secondary assets to benefit from spillover demand where available space is scarce, and sees more owners considering retrofits and repositioning of existing stock as an alternative to ground-up development.
On the occupier side, buildings themselves are taking on greater importance. Workplace experience, technology integration, amenities and overall asset quality are becoming decisive factors. According to JLL’s Future of Work Survey, two-thirds of organizations prefer AI-enabled buildings to basic building management systems, and a majority would prioritize quality and amenities over a prime location. Many occupiers believe hospitality-inspired, AI-enabled environments could materially reshape their portfolios over the next three to five years.
AI is also moving from experimentation into day-to-day operations. JLL notes that AI agents are beginning to loosen the historical link between company growth and headcount, particularly in knowledge-based industries, complicating forecasts for office demand and workplace strategies. The firm stresses that outcomes will vary by market and sector, as some roles are displaced and others created, leaving the net impact on employment and space needs uncertain.
Energy security has become another key consideration. Power grids originally built for more gradual and predictable loads are facing mounting pressure from data centers, advanced manufacturing facilities and electric vehicle infrastructure. Longer grid connection timelines, congestion and capacity uncertainty are pushing both owners and occupiers to assess energy availability much earlier in their decision-making. At the same time, grid-scale clean energy now accounts for most new generation, but regional imbalances between where new capacity is added and where energy-intensive demand is growing are emerging.
On the capital side, JLL reports that private wealth is playing a larger role in CRE, as family offices and high-net-worth investors increase allocations. Narrowing bid-ask spreads are pointing to better pricing clarity, and deeper bidding pools indicate that investors are returning as valuations adjust. A competitive debt market is further supporting activity, offering openings for both established players and new entrants.
JLL concludes that investors should remain attentive to sector- and market-specific dynamics when evaluating opportunities, while occupiers will need robust scenario planning to navigate the combined effects of AI adoption, energy security issues, supply chain disruptions and shifting macroeconomic conditions.
