While my journey into commercial real estate was purely by circumstance — it was not on my radar when I was studying poetry — I’ve now spent more than two decades in the industry, including 14 years with Confluent, a diversified developer. Development magazine recently asked me to share my perspective on CRE’s past, present and future possibilities.
Celeste Tanner
What innovations do you think have made the biggest impact on commercial real estate over the past five years?
By nature of our risk appetite and investment horizons, CRE professionals have been painstakingly slow at innovation adoption. I remember sitting in a proptech study session at a NAIOP conference many years ago when new operational technologies were all the rage. After a few minutes of discussion, an asset manager of one of the larger CRE investors at the time confessed that their greatest tech advancement was just to get all their properties reporting in the same software.
AI adoption in the industry is still in its infancy, but the number of individuals and companies utilizing even early stage models for concept planning, reporting, financial analysis and document review with continued success is incredible. As these technologies become more proven in design and construction integration, and as large-scale 3D printing technologies continue to prove out, I think we are finally reaching a tipping point for widespread adoption of real innovation practices in our industry.
What product do you predict will next experience a surge?
I wish I had a secret new asset class to point to, but I think the reality is that we are back into a pure fundamentals phase of real estate. While every market is different, in general we have been working through some significant supply deliveries in our industrial and multifamily spaces, which — combined with macroeconomic uncertainties — caused some pain points over the last 18 to 24 months in certain markets.
What we experienced is new supply decreasing significantly in those sectors, with deliveries dropping by over 50% in the United States, and absorption maintaining or improving year over year in 2025. That is a simple recipe for development demand to increase in the markets best demonstrating this supply-demand imbalance. I am a believer in smaller bay and true small-bay industrial. In addition, while I am not sure I buy into top-end forecasts on manufacturing demand, I think the inherent lack of operationally efficient supply will generate demand for quality manufacturing space in certain markets.
As we look at alternatives, pure fundamentals also mean a concentrated focus on demographic demands, which are hard to ignore. For example, I would be increasingly selective with new student housing opportunities, as our colleges face both population and sociopolitical pressures that will likely lead to decreased enrollments in the next five to 10 years.
Conversely, senior living is facing a potential supply crisis as the baby boomers age into prime occupancy years. According to NIC (National Investment Center for Seniors Housing & Care), with the population of Americans ages 80 and over expected to increase by 4 million in the next five years, the country would have to deliver twice as many units annually as it has ever delivered in a single calendar year just to keep up with demand. I think that spells real opportunity for those well versed in the asset class.
Where I expect to see the most rapid surge in our industry, however, has less to do with our product-level investment and more to do with our operational investment. Commercial real estate must embrace the hard reality that we need to be smarter, faster, more efficient and more cost-effective to remain sustainable. The actual future application of AI is still to be determined, but its potential uses have catalyzed the conversation and opened the minds of real estate professionals who are starting to understand how technological applications can improve how we resource, design, analyze and construct our projects.
NAIOP is working in partnership with other organizations to ensure our members have access to the best in real estate technology and can be at the forefront of this inevitable advancement.
What is the best investment opportunity today?
Ultimately, I think the best investment opportunity may be in our organization and in building partnerships with those who have adopted proven design and construction technologies that make site investigation, design and delivery more predictable and affordable. NAIOP is an incredible resource, both in our partnership and membership experience, to help identify best practices and pitfalls in investment strategy.
Celeste Tanner
President/Chief Development Officer, Confluent Development
2026 NAIOP Chair
