A funny thing about commercial real estate: while the buildings are fixed in place, the forces that create demand for them are anything but. They shift with time, trend and turmoil.

And if you’re not paying attention, you might miss the cues that tell you when and where activity will ignite.

Take the lease expiration, for example. It’s one of the most fundamental deal drivers in our business.

When a lease winds down, a decision must be made: renew, relocate or remain on a month-to-month basis. That single moment often becomes the catalyst for months of planning, broker engagement, site tours, financial modeling and ultimately, action.

No expiration? No pressure. And no pressure means no urgency, one of the key ingredients in getting deals done.

But leases alone don’t tell the whole story.

As we turned the corner into 2025, the tail end of 2024 gave us a master class in commercial real estate hesitation. Activity slowed, not because companies lacked need, but because they lacked certainty. Three macro forces kept tenants and investors glued to the sidelines:

Presidential politics

Decision-makers wanted to know what kind of business climate they’d be operating in before signing on to long-term commitments. Red or blue, regulation or deregulation, tax incentives or new compliance rules, these all influence corporate planning and therefore real estate strategy.

Interest rate direction

The Fed kept everyone guessing. Would rates go up again? Plateau? Begin to fall? Capital markets hate ambiguity, and so do chief financial officers staring at lease vs. own models.

Consumer confidence

As goes the consumer, so goes much of our economy. Businesses took a hard look at spending patterns, savings rates, and employment numbers before deciding whether now was the right time to expand.

Add to that a steady churn of mergers, acquisitions, and dispositions, and you’ve got another strong source of demand — though not always in the ways you might expect.

M&A can consolidate two footprints into one, freeing up space in one market while triggering new need in another. Dispositions, meanwhile, open up inventory for others or signal a company’s shift into a new vertical altogether.

But let’s zoom out even further.

Sometimes, real estate demand is born from entirely new industries, and those moments often follow technology breakthroughs or policy shifts. Consider:

—Electric vehicles and their supporting infrastructure: battery plants, charging stations and parts distribution centers.

—Lithium-ion batteries, which require massive and specialized manufacturing space.

—Data centers, the digital backbones of our modern lives, quietly taking millions of square feet with very specific utility and security requirements.

We’ve seen this before. The 1980s research and development boom created entire submarkets for tech, biotech, and medical device firms. Those buildings weren’t just shells — they were incubators for innovation.

Sometimes the spark comes from government regulation.

Remember when the EPA mandated the elimination of Freon from air conditioning units? That one change sent shockwaves through the HVAC industry, creating demand for new service hubs, training facilities and parts distribution warehouses. A political decision translated directly into square footage demand.

In short, demand drivers in commercial real estate are everywhere — you just have to know where to look.

The next wave of activity might not come from a lease expiration or a low interest rate. It might come from an emerging technology, a new federal incentive or even a global conflict that reshapes the supply chain.

Our job, as advisers, is to interpret the signals, anticipate the shifts, and help our clients position themselves ahead of the curve.

Because buildings may be stationary, but the forces behind them are always in motion.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.