By DON FENLEY

Tri-Cities commercial real estate activity is moderating from recent highs, but January transaction data shows a market that is stabilizing.

An analysis of January commercial transactions from 2019 through 2026 shows a clear cycle: pandemic disruption, a land-driven expansion phase, and now a transition into a more disciplined, end-user-focused environment.

January 2026 recorded 112 commercial transactions, down from the cycle peak of 147 in January 2024, but still approximately 20% higher than pre-pandemic January 2019 levels, underscoring that overall market activity remains structurally elevated.

Market Cycle in Three Phases

• Pre-pandemic baseline (2019–2020): January transactions averaged in the low 90s.
• Pandemic reset (2021–2022): Activity dipped to a low of 59 in January 2021 before beginning to recover.
• Expansion and normalization (2023–2026): Transactions surged to 140 in January 2023 and peaked at 147 in January 2024 before easing to 129 in 2025 and 112 in 2026.

The post-COVID surge has clearly transitioned into a normalization phase, with buyers becoming more selective and capital more disciplined.

Land dominates transactions

Land transactions dominate the current commercial landscape.

From 2023 forward, land has represented roughly 80% to 90% of all January CRE activity, peaking at 133 transactions in January 2024. While January 2026 land deals declined to 95, land remains by far the largest segment of commercial activity.

This trend reflects strategic site acquisition rather than speculative excess. Land activity is serving as a leading indicator that signals confidence in long-term regional growth.

Office Market Finds a New Baseline

Office transactions have stabilized in the four to six deal range annually over the past several years. While volumes remain below pre-pandemic levels, activity has not collapsed.

Instead, the office market has shifted toward smaller footprints, medical, and professional uses, and owner-occupied purchases replacing traditional leasing

Office is no longer a primary growth driver but continues to function as a necessary service asset class.

Retail-Commercial Shows Resilience

Retail-commercial transactions rebounded following pandemic-era declines and have stabilized between five and nine deals each January. Neighborhood retail, service-oriented tenants, and select income-producing properties continue to attract buyers.

Retail activity suggests a market that is functioning normally.

Multi-Family Evolves Toward Flex Formats

Traditional multi-family transactions remain limited, but flex multi-family activity tells a different story. After peaking in 2022, flex formats have settled into steady mid-single-digit annual volumes.

This reflects a shift toward smaller projects, mixed-use concepts, and build-to-rent models rather than large conventional apartment developments.

Industrial Supply Remains Tight

Industrial transactions continue to post low volumes, averaging one to two deals per January in recent years. This likely reflects limited available inventory rather than weak demand, pointing to a potential growth opportunity as new products come online.

Market Outlook

January 2026 data points to a market that has moved from momentum-driven activity to positioning-driven decision-making.

Speculative land buying has cooled. End users now represent a larger share of transactions. Buyers are approaching deals with greater caution. This shift is consistent with broader economic conditions and rising financing costs.

Land gained between 2023 and 2025 has established a development pipeline that positions the region for renewed construction activity once borrowing conditions improve.

The Tri-Cities commercial market has transitioned into a more balanced phase. Activity remains above historical norms, but the pace has moderated.

Categories: REAL ESTATE