“Uncertainty” was the buzzword of 2025 across a number of industries. For the architecture, engineering, development and construction industry in 2026, there will be a new theme: “cautious optimism.”
There is a lot to be excited about across Connecticut’s commercial, industrial and residential development markets, as well as in public infrastructure, though the level of optimism varies by sector.
Borrowing costs, interest rates and construction costs appear to at least be holding steady. That stability has not been present for the last several years.
And while the regulatory approval climate in Connecticut and New England remains challenging in some locations, there are major breakthroughs around the state to celebrate.
Mixed-use and adaptive re-use projects gain momentum
Demand remains strong for large mixed-use projects that offer live-work-play environments outside major downtowns.
These kinds of suburban and urban developments, such as Storrs Center in Mansfield and Blue Back Square in West Hartford, can enhance a location and create a destination by building on foundational elements already in place — but there are a lot of moving parts.
Developers are sifting through the challenges to make headway. The Heritage Park redevelopment of the former UConn campus in West Hartford is gaining momentum at a site where other projects have failed to launch. Smaller examples, like Founders Square in Windsor, made it across the finish line last year.
Other large adaptive reuse projects currently in the works include mixed-use redevelopment of the Westbrook Outlets and the Crystal Mall, which was recently purchased by General Dynamics Electric Boat and is being converted into office space and training facilities.
These projects will certainly be economic engines, and it’s easy to imagine the Meriden and Enfield malls following with their own adaptive redevelopments, whether for medical office, health care or mixed use.
In other areas of more typical retail/commercial development, adaptation and activity continues to happen, including programmatic rollouts such as quick-serve restaurants and medical office buildings.
Steady activity in industrial warehouse sector
The afterglow of the astronomical e-commerce boom of the COVID-19 era has subsided, and development of industrial warehouse projects has settled into a more realistic long-term level.
Nonetheless, there is a steady flow of projects under way in this space, particularly along the I-395 corridor, near Bradley International Airport and other key strategic locations in the state.
Four or five years ago, real estate costs were more reasonable and time was more valuable than money. Developers rapidly secured sites and simply pushed past any challenges that arose.
Now, developers are moving ahead more selectively and doing a good amount of due diligence to make sure the sites they’re looking at are strategic and reasonably priced. Constraints and challenges are identified upfront.
While there are still speculative warehouse projects, there are fewer than in recent years.
Public sector development ending a cycle
September 2026 marks the end of the five-year infrastructure bill that authorized over a trillion dollars in transportation and infrastructure spending.
Projects are continuing toward completion in the near term. Looking toward the end of 2026 and beyond, however, it’s difficult to see how larger projects will continue without a new long-term federal infrastructure bill.
In some cases there will likely be continuing authorizations extending funding for one year. While that sounds positive, the reality is that larger projects typically span three to six years. It’s difficult for departments of transportation and municipalities to plan and execute long-term projects based on a one-year authorization.
Coming off the longest government shutdown in history, I think it’s safe to characterize the federal funding climate as dynamic. In this type of environment, public sector projects that are well researched and ready to go are best positioned to take advantage when the window of opportunity opens.
Derek Kohl is vice president of operations at BL Companies, an architecture, engineering, environmental and land surveying firm headquartered in Meriden.
