Property capacity for the habitational asset class remains abundant, and multifamily assets — especially those with catastrophe-prone locations — are receiving rate cuts. These conditions are expected to continue throughout 2026, as insurers’ treaty reinsurance costs have fallen. One reason for that is natural catastrophe losses over the past 10 years have been high but relatively stable, with severe convective storms (SCS) representing the top loss driver for insurers. SCS events have, however, tempered property insurers’ appetites for real estate risks in some states, such as Texas and Colorado.

On wood frame or superior construction with improvements, property rates for ground-up coverage are down 5% to 15% at renewal. Even larger reductions of 20% to 30% are available on shared and layered property placements.

The casualty insurance market remains a challenge for habitational assets, with insurers seeking rate increases, higher self-insured retentions, compressed limits, and tighter terms. Most retail insurers have exited the multifamily space, while others are restricting terms on habitability, A&B, and SML coverage. Wholesale insurers have retained some appetite, and new insurers are entering the space, although softening does not appear to be on the horizon in the near term.

Subclasses of multifamily housing — for example, student housing and lower-income rental assets such as Section 8 and Section 42 housing — are more difficult to place amid insurers’ limited appetite for writing these risks and strict lender requirements.

Habitational lenders, particularly those backed by the Federal National Mortgage Association (FNMA or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac), typically require SML coverage and self-insured retentions of no more than $25,000 in low-income housing programs. Solving these challenges increasingly requires creativity on the part of the broker.

In industrial properties, the national vacancy rate has stabilized at 9.2%, and new supply is forecast to increase sharply in the next three years, to nearly 400 million square feet, according to market intelligence firm Yardi Matrix.

Data centers account for much of the activity in the industrial asset class, driven by demand for artificial intelligence. Data center construction is tempered somewhat by access to power in certain areas. Nevertheless, data centers are booming, with fast-paced projects to build large, single-tenant properties as well as colocation data centers used by multiple tenants. By 2030, 61% of all data center capacity will come from hyperscalers — operators of the largest data centers — up from 44% today, according to Synergy.

Insurance pricing expectations here are similar to those seen by nonhabitational assets, with buyers often able to secure single-digit rate decreases at renewal for single-insurer placements and larger rate reductions for shared and layered programs. Primary and excess liability pricing also continues to rise, but in percentages lower than most of the marketplace.

The high value of data centers — a 100-megawatt data center can cost billions of dollars to build — is bringing more capacity to this type of risk. In addition to physical property exposures, business interruption and loss of rents represent additional potentially significant risks. As with other real estate assets, underwriters will want details on a property, its operating model for a single tenant or multiple ones, and other factors related to on-site power generation, site security, and fire suppression systems.