CT/Western MA. SIOR completes semi-annual chapter market survey

Hartford, CT The Connecticut/ Western Massachusetts chapter of SIOR has completed its semi-annual membership survey of commercial real estate market conditions. The survey is based on market activity for the period July 1, 2025, through December 31, 2025, within Connecticut and western Massachusetts in the office and industrial sectors.

Market conditions for the latter half of 2025 as contrasted with the first half of the year were positive with member responses almost evenly divided between improvement (54%) and no change (46%). Market predictions for 2026 are also positive as a majority predict improvement (69%) or no change (31%) with no expectations of a decline.

Predictions regarding lease rates for 2026 for the industrial and office sectors continue a trend from prior surveys. For the industrial sector, the rapid increase in lease rates of the last several years appears to have abated. Members forecast no changes in lease rates (50%) with remaining responses evenly split between a decrease (25%) or an increase (25%). 

However, market inventory for industrial product continues to be tight with limited availability which could serve to increase lease rates in the future. Predictions for industrial vacancy rates in 2026 were also positive as results were as follows: decrease (58%), no change (25%) or increase (17%), which suggest continued robust leasing activity.

The office sector appears to have stabilized in terms of lease rates although demand is still weak. A majority of members forecast office lease rates will remain unchanged (90%) and the remainder expect further decline in office lease rates (10%) and no forecasts for an increase. Predictions for office vacancy rates in 2026 were more optimistic than prior surveys; results were: decrease (50%), unchanged (40%) and increase (10%).

The outlook for industrial sales prices in 2026 is positive as product continues to be in demand by both users and investors with limited availability. Members predict stable pricing (42%) or price increases (33%) with limited predictions of a decrease (25%).

Predictions for office sales prices indicate a degree of stabilization as a majority of members predict pricing will remain the same (70%) or increase (11%) with no predictions of a decline.

Predictions for investment cap rates are for the overall market and indicate a stable and positive market: no change (67%), decrease (22%) or increase (11%). Increasing cap rates result in a decrease in sales prices.

The majority of SIOR Chapter members anticipate new development will remain the same (85%) in 2026 with the remainder predicting an increase (7.5%) or a decline (7.5%). Expectations regarding growth by users in 2026 indicate no change (62%) or expansion (23%) or contraction (15%).