Nexus National Monthly Briefing

If you manage or own commercial property, you already know that operating expenses have been climbing for the better part of three years. What is worth paying attention to right now is where those increases are starting to level off and where they are not.

Insurance is the clearest example. After several years of sharp premium hikes, the commercial property insurance market is finally stabilizing. Industry data shows average rate increases settling around 3% heading into 2026, down significantly from the double-digit jumps that defined 2022 through 2024. That said, properties in catastrophe-prone regions or those with deferred maintenance are still seeing much steeper renewals. If your portfolio includes coastal or storm-exposed assets, this is a good year to get ahead of your renewal with a formal risk assessment rather than waiting for the notice to arrive.

On the construction and renovation side, material costs remain stubbornly elevated. Compared to pre-pandemic pricing, materials for commercial properties have risen approximately 35%, which outpaces the 23% that consumers have experienced across general goods. That gap matters when you are budgeting for tenant improvements, roof replacements, or parking lot resurfacing. Getting competitive bids from multiple contractors has become more important than ever, because margins vary widely depending on who you work with and how they source materials.

The broader picture is cautiously positive. Inflation has come down to around 2.7%, transaction volumes in commercial real estate picked up in late 2025, and lending conditions have loosened compared to the tight environment of 2023. But the cumulative weight of several years of cost increases means that most property operators are looking closely at every line item in their operating budgets. That kind of scrutiny tends to pay off, especially on recurring vendor contracts where pricing has not been reviewed in a while.

Trade policy has been one of the more disruptive forces in commercial real estate over the past year, and the effects continue to ripple through operating budgets and capital planning. Cushman and Wakefield estimated that tariff rates as of late 2025 added roughly 9% to construction materials costs relative to historical averages. CBRE has put the total construction cost impact for commercial projects somewhere between 3% and 5% once all current tariff schedules are factored in.

For property operators, the most immediate concern is not new construction but ongoing maintenance and renovation. Steel, aluminum, HVAC components, plumbing fixtures, and electrical equipment have all been affected by tariff-related price increases. If you are planning any significant capital work this year, it is worth building a larger contingency into your budget and locking in pricing with contractors early rather than relying on estimates from six months ago.

There is also a downstream effect on tenants. Retailers dealing with higher costs on imported goods may start pulling back on expansion or renegotiating lease terms. Strip malls and retail centers with higher tenant turnover should be watching this closely. The best defense is a well-maintained property with competitive operating costs, because tenants under margin pressure tend to consolidate into locations where the total cost of occupancy makes the most sense for their business.

The U.S. waste collection industry generates over $86 billion in annual revenue, and the sector has been growing at a steady clip of about 3% per year. What is less well known is how much pricing variation exists within the market. Two businesses of similar size, in the same city, producing the same type of waste, can be paying dramatically different rates for the same level of service. The difference usually comes down to when the contract was last negotiated and whether anyone has looked at it since.

Haulers set commercial rates based on a combination of container size, pickup frequency, disposal fees, and market conditions at the time of the original agreement. Once those rates are locked in, they tend to only move upward. Annual escalators, fuel surcharges, environmental fees, and administrative charges accumulate over time. Unless someone is actively benchmarking those rates against current market pricing, there is no natural mechanism that brings them back in line with what the service actually costs.

This is also a seasonal consideration. Spring and summer tend to bring higher waste volumes for retail and food-service tenants as foot traffic picks up. If your service levels were set during a slower period, they may be appropriately sized for now. But if they were set during a high-volume stretch and never dialed back afterward, you could be paying for capacity you do not need nine months out of the year.

An independent audit typically takes a few days and does not require any changes to your current service. It simply tells you whether your pricing reflects the market or whether there is money being left on the table.

For anyone managing commercial property, understanding the broader market dynamics behind waste pricing helps explain why rates vary so much from one contract to the next.

The key detail in this data is the sheer number of operators. With nearly 20,000 waste collection businesses in the U.S., pricing is driven as much by local competitive dynamics as it is by national market trends. A hauler that dominates one metro area may price very differently than a hauler competing for share in the next city over. That fragmentation is exactly what makes third-party benchmarking so effective, because most property managers do not have visibility into what the hauler across town is charging someone else for the same service.

Winter takes a toll on commercial properties in ways that are not always visible until warmer weather arrives. March is the right time to get ahead of problems before they turn into expensive emergency repairs in July. Here are five areas worth prioritizing this month.

Roof and drainage. Freeze-thaw cycles create cracks, loosen flashing, and clog drains with debris. A visual inspection now can catch problems that would otherwise show up as a ceiling leak during the first heavy spring rain. If your roof is more than 10 years old, it is worth scheduling a professional assessment rather than relying on a quick walkthrough.

HVAC transition. This is the window to service cooling systems before you actually need them. Replacing air filters, checking refrigerant levels, and inspecting belts and pulleys in March costs a fraction of what an emergency repair will run during a heatwave. And if your tenants are responsible for their own units, a reminder email now can save everyone a headache later. A broken AC complaint in August becomes everyone's problem regardless of whose name is on the maintenance clause.

Parking lots and walkways. Potholes, cracked curbing, and faded striping are more than cosmetic. They create liability exposure, and they send a signal to tenants and their customers about how the property is being managed. Sealcoating and patching in spring is significantly cheaper than full resurfacing later, and it extends the life of the pavement by years.

Landscaping scope. Many landscape contracts carry over from year to year without adjustment. If your tenant mix has changed, if a section of the property gets less foot traffic than it used to, or if you have added or removed signage, the scope of work might not match the property anymore. A 15-minute walkthrough with your landscaper before the growing season starts can right-size the agreement and save money through the rest of the year.

Vendor contracts broadly. This one goes beyond landscaping. Janitorial services, pest control, HVAC maintenance agreements, and waste hauling all tend to renew at rates that reflect last year's pricing rather than this year's market. Spring is a natural inflection point to pull those contracts out and ask whether the scope and pricing still make sense. The contracts that cost the most are usually the ones nobody has reviewed in a while.

If you manage more than one property, there is a good chance your vendors are pricing each location independently, even when the properties share a metro area, similar square footage, or the same service needs. That creates an opportunity most operators overlook.

Portfolio-level vendor management means looking at service agreements across all your properties side by side and asking a straightforward question: are we getting consistent pricing and service quality everywhere? More often than not, the answer is no. One property might be paying 20% more for the same dumpster service as a sister property ten miles away, simply because the contracts were negotiated at different times by different people.

This is not about switching to the cheapest vendor across the board. It is about visibility. When you can see what every property is paying for every service, you can make smarter decisions about where to renegotiate, where to consolidate, and where the current arrangement is actually working well and should be left alone. That kind of clarity tends to produce savings without requiring anyone to sacrifice service quality.