Chris Beason, president of NAI Ruhl Commercial Company, holds a 2025 Commercial Real Estate Market Report on Tuesday, April 29, during the 10th annual Commercial Real Estate Market Report presentation at the Rhythm City Casino Resort in Davenport. CREDIT DAVE THOMPSON
The Quad Cities commercial real estate market is evolving, and even going through a “dynamic recalibration.” But it’s still in good shape, and better than many national trends in real estate. Those were some of the top messages delivered Tuesday, April 29, during the 10th annual Commercial Real Estate Market Report presented by the NAI […]
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The Quad Cities commercial real estate market is evolving, and even going through a “dynamic recalibration.” But it’s still in good shape, and better than many national trends in real estate.Those were some of the top messages delivered Tuesday, April 29, during the 10th annual Commercial Real Estate Market Report presented by the NAI Ruhl Commercial Company at the Rhythm City Casino Resort, Davenport.“There are some really cool opportunities here in real estate. … The sentiment in the Quad Cities is better than the sentiment nationally,” Chris Beason, president of NAI Ruhl Commercial Company, told the Quad Cities Regional Business Journal at the annual meeting, which was attended by about 200 business and community leaders.Copies of the NAI Ruhl Commercial Co.’s 2025 Commercial Real Estate Market Report are shown at the company’s 10th annual Market Report presentation at Rhythm City Casino Resort, Davenport. CREDIT DAVE THOMPSONDuring Tuesday’s program, he told the crowd that “flexibility is the name of the game today” in real estate. For instance, in the retail sector, an emerging trend is to repurpose and modernize aging retail properties for contemporary needs, according to a 19-page NAI Ruhl report presented at the event. The report noted several recent retail transactions with this trend in mind. For instance, Tony’s Chicago Style Pizza & Breakfast recently set up shop at 2297 Falcon Ave., Bettendorf, which was the former site of Ross’ Family Restaurant – an iconic Quad Cities restaurant for decades. Also, Bob’s Discount Furniture moved into 4022 E. 53rd St., Davenport, the former home of Bed, Bath & Beyond.“Looking ahead, the QC retail market is expected to maintain a stable trajectory period. Lease rates and demand should remain steady, mirroring broader national trends where economic uncertainty is prompting landlords and tenants to take a cautious, measured approach,” according to the report.“There’s a focus on creating community spaces (in the retail sector),” Mr. Beason said.That need for flexibility can also be seen in the office space sector. While some parts of the country are seeing a freefall in the use of office space, that is not the case locally, he added. However, this sector on the local front needs to change with the evolving workplace trends.The report states that many businesses are using hybrid work models to reimagine their office layouts. “Rather than eliminating office space, companies are repurposing their environments to facilitate flexibility – integrating shared meeting areas, technology-enhanced collaborative spaces, and amenities designed to support a balanced work experience,” the report adds.When it comes to office space, the Quad Cities, unlike many metro areas, was never overbuilt. New development has been driven by actual demand rather than speculation, resulting in a more stable market, the report states.
New meeting format
The program featured a shift from previous years’ presentations, which featured a keynote speaker and a formal presentation. For instance, last year had a panel of local real estate professionals sharing their views on the market.This year, Mr. Beason gave about a 20-minute presentation about local real estate trends and the current activity for each segment of the commercial real estate market, including retail, office, land, industrial, and property management. Afterwards, the audience was invited to network with NAI Ruhl Commercial brokers and industry experts to talk about specific trends and topics that matter to them.Mr. Beason said the meeting format change was made at the request of people attending past events. Many of those people said the annual gathering would be more useful to them if they could get answers to their specific questions on commercial real estate matters. The new meeting format had that request in mind as real estate professionals were gathered at tables in the back of the meeting room. Each table was set up to answer questions and discuss specific real estate sector topics, such as industrial, office, retail, land and farm, and property management.Sponsors of the market report event included: Quad City Bank & Trust, Per Mar Security Services, Bi-State Masonry, Principal, Ruhl&Ruhl Realtors, RSM, MidAmerican Energy Co., CBI Bank & Trust, Nelson Brothers Agency, Carpetland USA, Northeast Mechanical and Werner Restoration Services.
‘Good annual snapshot’
Several attendees said they liked the new format, and found the information helpful.“They provided a more rosy picture of the Quad Cities than you get in other places. … It was heartening to see we have not suffered the setbacks many people in the country have faced,” said Bettendorf Mayor Bob Gallagher.A.J. Loss, president and CEO of Bush Construction, said the meeting was a “good annual snapshot” of what’s happening in the Quad Cities.Mr. Loss added that he was particularly interested in hearing about trends in office space. “It appears there’s still use for office space, but just different utilizations,” he added.The economic overview in NAI Ruhl’s report states: “Nationally, investors and developers have become more cautious, yet properties in strong locations with robust fundamentals remain highly attractive.”
QC market performance
In many cases, the Quad Cities region is a strong location for commercial real estate. Here is the report’s QC market analysis by sector:
Industrial
The region mirrors the country with increased industrial building development through 2023, especially with large distribution centers. Activity has slowed, vacancies have modestly risen, but the “fundamentals remain strong.”
There is an inventory shortage for smaller industrial space – 10,000 to 50,000 square feet.
Prices will remain at higher levels. “2025 looks to be a transitional year with activity leveling off to more stable levels. We do expect lease rates and sale prices to remain at higher levels due to limited supply and the cost of new construction,” the report states.
Some notable industrial developments in the works include the Meta Data Center in Davenport with about 715,000 square feet; the Atlas Roofing Company factory in Clinton, Iowa, with about 440,000 square feet; and the Ryan US Development - Logistics in Davenport with about 225,000 square feet.
Retail
Retail in the region will maintain steady growth, “boosted by a blend of national tenants and local businesses. Developments near the TBK Bank Sports Complex and Walmart-anchored centers have strengthened market confidence,” the report showed.
Some challenges include higher property insurance premiums, increased expenses and rising labor costs. Mr. Beason told the crowd that the challenge of a skilled labor shortage continues. “The labor crunch is here to stay.”
There is also a shift to smaller retail spaces. Many retailers are opting for smaller, more manageable footprints rather than expansive big-box locations.
“With the retail sector facing continuous change, adaptable spaces are becoming increasingly desirable,” according to the report.
Office space
Offices are facing a “dynamic recalibration,” the report said. The region has robust activity in this area, especially with high-quality and suburban office developments near major transportation corridors.
The office market is shifting toward suburban locations, reflecting preferences for flexible spaces and easy accessibility.
Non-profit groups are expected to play an increasingly big role in driving office demand, especially as medical and wellness services expand beyond traditional hospital campuses into community-based locations.
Land and farm
Land transactions remain strong, supported by both development-ready commercial parcels and premium ag properties. High-quality farmland has maintained impressive valuations.
Rising interest rates and elevated construction costs have tempered some enthusiasm, but areas such as Bettendorf and Eldridge continue to attract investment.
Growing interest in renewable energy solutions presents opportunities for solar farms to support data center operations.
NAI Ruhl Commercial Company is the region’s leading commercial real estate firm specializing in commercial real estate brokerage, consulting, corporate services, property management, development, and maintenance services with offices in the Quad-Cities region, and serving Eastern Iowa, Western Illinois, and Southwest Wisconsin. The company reaches markets worldwide through its partnership with NAI Global, the world’s only managed network of commercial real estate firms.
