February 2026 — Invest: spoke with Jim Anthony, CEO of APG Companies, about how policy shifts, capital constraints, and demographic pressures are reshaping commercial real estate, and where opportunity is emerging amid disruption. “We’re benefiting, in the Triangle, and that’s why I stay optimistic about 2026 and beyond in our market area, because we tend to be the place people go when they’re in distress in other parts of the country,” said Anthony.
Over the past year, what shifts have you seen in the commercial real estate landscape, and how have they influenced how APG operates or invests?
This has been a year of structural change rather than normal cyclical variation. One of the most important drivers has been trade policy. Tariffs and geopolitical pressures have triggered a wave of reshoring that is unprecedented in scope. For markets with land, infrastructure, and workforce capacity, that shift is creating long-term tailwinds and a new foundation for investment.
At the same time, tighter border controls and enforcement have produced labor-market ripple effects. Many construction and manufacturing operations have seen workers hesitate to show up on job sites, which has slowed timelines for projects that otherwise have demand and financing. The country clearly needs a dependable worker-permit system that balances security with economic necessity. Until that comes together, labor constraints will continue to shape project feasibility and timelines.
Overlaying all of this is the story of capital. Interest rate moderation in 2025 has brought stability, but access to leverage has not recovered in parallel. Loan-to-value ratios that once ranged from 70% to 80% now often land between 50% and 65%. That equity gap has removed buyers from the field and reduced transaction velocity in every major asset class.
As a result, repricing is underway. Asset values are adjusting downward, cap rates are moving higher, and both investors and lenders are scrutinizing underwriting assumptions more closely. Part of this reflects a correction from a prior period of artificially low rates and inflated pricing. Markets are recalibrating to fundamentals, and until that recalibration settles, lenders will remain cautious about advancing long-term capital.
For APG, this means maintaining discipline, controlling leverage, and focusing on opportunities where repricing creates value. The fundamentals of Raleigh-Durham and similar growth markets remain compelling, but the terms under which deals can be executed have shifted meaningfully.
How are rates and capital availability influencing your environment today?
Nominal rates are improving, but loan structures and loan availability have not normalized. Many lenders remain conservative on leverage and are reluctant to extend terms beyond five years. For developers and investors, that short horizon adds refinancing risk and narrows the universe of viable projects.
The banking system is stronger than it was at the peak of volatility, but risk appetite has not returned to historical levels. That is especially true in sectors where values are still correcting. A higher equity requirement and a smaller pool of lenders prolong the adjustment period and keep transaction volumes below typical levels.
For firms like ours, this requires careful alignment with lenders’ risk frameworks and a willingness to prioritize projects that remain durable under conservative scenarios. It is a different environment than the mid-2010s, when capital was abundant and pricing was accelerating. Today’s landscape rewards patience, underwriting discipline, and strong balance sheet management.
How would you characterize the office market now in Raleigh-Durham and in comparable metros?
The market is bifurcated. Highly amenitized, mixed-use districts — such as North Hills in Raleigh — continue to outperform. These projects attract marquee tenants willing to relocate for quality, convenience, and modern design. They are achieving the highest rents in the market.
Most of the remaining office inventory is experiencing the opposite trend. Older Class A-minus and B properties face rising vacancies, downward pressure on effective rents, and higher operating expenses. When rental income is flat but taxes, insurance, and maintenance rise each year, net income erodes even if buildings remain leased. In many cases, owners are evaluating whether to continue operating at diminishing returns or pursue redevelopment.
Redevelopment is increasingly viable. In downtowns with high construction costs and small building footprints, office conversions are more challenging. Suburban locations, however, offer land, flexibility, and lower conversion costs. Markets across the country — especially Atlanta — are seeing office demolitions followed by redevelopment into apartments, townhomes or mixed-use environments.
A newer factor in the office market is AI. While it will not replace skilled trades, it is likely to reduce the number of traditional office roles over time. Functions such as marketing, research, drafting, design assistance, legal, and basic administrative workflow are increasingly augmented by automated systems. That has real implications for long-term office demand and should factor into underwriting and asset strategy.
Looking ahead, where do you see the greatest opportunities over the next three to five years?
Disruption is creating several avenues for real value. The office sector is one of the clearest. Many suburban buildings are strong candidates for adaptive reuse into schools, healthcare facilities, government buildings, or institutional uses. Others are better suited for full demolition and redevelopment into residential or mixed-use communities. These sites often benefit from existing infrastructure, ample parking, and proximity to population centers.
Demographic trends are another powerful driver. Shrinking academic enrollment pools are affecting colleges nationwide, and some institutions will consolidate or close. While that is difficult from a community standpoint, it also opens opportunities to reposition campuses and purpose-built student housing into more productive uses, including affordable housing.
In multifamily, most markets are seeing assets trade below replacement cost due to rising cap rates, softening rents, and elevated concessions. For investors with long-term horizons, that creates opportunities to acquire high-quality properties at meaningful discounts.
Land pricing is also adjusting. Projects that cannot secure construction financing or no longer pencil at today’s rates are being paused or shelved. As those sites come back to market, they often do so at lower valuations, creating a window for more patient capital.
The priority is to focus on opportunities that align with long-term regional fundamentals. Raleigh-Durham remains a magnet for talent and investment, and that resilience supports our optimism looking toward 2026. We’re benefiting, and that’s why I stay optimistic about 2026 and beyond. In our market area, we tend to be the place people go when they’re in distress in other parts of the country. With disciplined leverage, selective acquisitions, and an openness to reimagining underperforming assets, we see pathways to create value even in a more constrained capital environment.