As construction and real estate leaders prepare for year-end planning, the industry presents a unique mix of opportunity and operational challenges. While project pipelines remain robust and certain sectors show exceptional strength, success in 2026 will depend on addressing four critical areas that continue to shape strategic decisions.
1. The Talent Equation: Strong Demand Meets Workforce Reality
Perhaps no challenge better illustrates the current state of construction and real estate than this: backlogs are strong, pipelines are full, yet finding skilled workers remains the primary barrier to growth. This isn’t a temporary staffing shortage—it’s a fundamental shift that requires strategic workforce planning.
As you approach year-end, consider these workforce strategies:
Review your current talent retention programs and compensation structures. With demand outpacing supply, protecting your existing workforce is as critical as recruitment. Evaluate whether your benefits packages, career development paths, and workplace culture initiatives truly differentiate your organization.
Look beyond traditional recruitment channels. Partnership opportunities with trade schools, apprenticeship programs, and workforce development organizations need budget allocation and planning now for 2026 implementation. Consider how technology might reduce your dependence on hard-to-find skilled positions through automation and efficiency gains.
2. Project Financing: A Tale of Two Markets
The financing landscape reveals clear divisions. Data center construction, healthcare facilities, higher education projects, and public infrastructure work continue to attract readily available capital. These sectors benefit from stable, long-term demand drivers and, in many cases, government backing or essential service status.
However, private commercial development tells a different story. Financing delays have become common, requiring developers to demonstrate stronger fundamentals and accept more stringent terms. This divergence demands careful project selection and timing strategies.
For year-end planning, assess your project mix and consider shifting resources toward sectors with stronger financing availability. If your portfolio leans heavily toward private commercial work, building relationships with alternative financing sources and strengthening your balance sheet should be immediate priorities.
3. Technology as Competitive Advantage
The question is no longer whether to adopt innovative technology, but how quickly you can integrate tools that drive measurable efficiency. Construction technology has moved beyond experimentation to proven ROI, yet many firms struggle with implementation and adoption.
Your technology roadmap for 2026 should focus on three areas:
- First, project management and communication platforms that connect field and office operations. These systems reduce errors, improve scheduling, and provide real-time project visibility that clients increasingly expect.
- Second, equipment and tools that address your workforce challenges. Whether through equipment telematics, prefabrication technologies, or automated systems, strategic technology investments can multiply your existing team’s productivity.
- Third, data analytics capabilities that improve estimating accuracy and project selection. Understanding your true project profitability and identifying patterns in successful projects becomes critical as margins face pressure.
4. Succession Planning: Protecting Long-Term Value
The construction and real estate industry faces a leadership transition wave. Many firms built over decades now need clear succession plans to protect value and ensure continuity. This isn’t just about retirement—it’s about building sustainable organizations that can thrive through ownership transitions.
Effective succession planning requires honest assessment of current leadership depth, identification of future leaders, and structured development programs. Consider whether your ownership structure supports smooth transitions. Employee stock ownership plans (ESOPs), management buyouts, and phased transitions each offer different advantages depending on your specific situation.
Begin succession conversations now, even if transition seems years away. The tax implications, financing requirements, and leadership development needed for successful transitions require significant lead time.
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Looking Ahead with Confidence
While concerns about tariffs, infrastructure legislation, and future tax policy generate headlines, industry leaders consistently report these as secondary considerations. The fundamentals driving construction and real estate—housing demand, infrastructure needs, technological advancement, and economic growth—remain strong.
Your end-of-year planning should focus on the controllable factors that directly impact your ability to capitalize on opportunities. Address workforce challenges creatively. Position your firm in sectors with reliable financing. Invest in technology that solves real operational problems. Build succession plans that protect the value you’ve created.
The construction and real estate industry enters 2026 with strong fundamentals but clear challenges. Success will belong to those who plan strategically, execute consistently, and maintain the operational excellence that has always distinguished industry leaders.
Doug Houser, CPA, MBA, CEPA, serves as Construction & Real Estate industry leader at Rea. He works with construction and real estate leaders to navigate industry challenges and capitalize on opportunities. Connect with Doug and Rea’s Construction & Real Estate advisors to discuss your year-end planning priorities.
