Thomas Sweeney is principal of Sweeney Real Estate & Appraisal. A graduate of Providence College, Sweeney is a certified general appraiser, a real estate broker and a member of the Society of Industrial and Officer Realtors with an active Industrial Designation. In 2022, Sweeney was named Realtor of the Year by the Rhode Island Commercial & Appraisal Board of Realtors.
PBN: Over the past year, what major trends have you observed in Rhode Island’s commercial real estate market – particularly in Providence and its surrounding areas – and how do you expect those trends to evolve in 2026?
SWEENEY: Over the past year, one of the most significant trends we’ve observed in Rhode Island – particularly in Providence – has been the continued challenge of fully reoccupying office space, especially in the downtown core. The traditional five-day, fully in-office work model has fundamentally changed and is unlikely to return in its pre-pandemic form. Hybrid work has clearly emerged as the dominant model.
While remote work remains an option, it is increasingly being reassessed by both employers and employees. Corporate relocations, such as Hasbro Inc.’s move, are also creating opportunities for organizations that were previously fully remote to reestablish a physical office presence. At the same time, fully remote roles are losing some of their appeal within the broader workforce, and in 2026 we expect companies to make more intentional decisions around returning to the office.
As a result, demand for office space will continue – but with a heightened focus on finding the right fit to support employee needs. Tenants are prioritizing amenities and environments that compete with remote work, while fostering both structured, scheduled collaboration and organic, day-to-day interaction.
PBN: With interest rates remaining relatively high, how has investor sentiment shifted in Rhode Island’s commercial real estate sector? Are you seeing deals stall, or are new kinds of investors or financing strategies emerging?
SWEENEY: We haven’t seen deals stall across Rhode Island’s commercial real estate market, but investor sentiment has become noticeably more cautious. While interest rates are beginning to trend downward, buyers remain highly focused on bottom lines, and cap rates continue to be underwritten conservatively, even though some assets are due for a lower cap rate.
There is still a disconnect between seller expectations and buyer discipline. Sellers are often anchored to prior valuations, while buyers are adjusting to current financing conditions. In many cases, transactions move forward when both sides meet in the middle at a price that may not fully satisfy either party but ultimately align with their respective objectives. There is still a gap we are working to bridge.
PBN: As downtown Providence continues adapting to post-pandemic work patterns, what’s your assessment of the local office market’s health? Are there particular opportunities or challenges you see for owners and tenants right now?
SWEENEY: The downtown Providence office market is in a transitional period. Tenants who are moving downtown are often doing so in spaces where landlords are making significant investments in their properties. We are seeing more tenant improvements included in lease deals, in turn we are seeing an increase in term length and renewals.
It is becoming increasingly challenging for smaller tenants to find suitable downtown office options. A prior flurry of downsizing activity, coupled with the conversion of office properties to residential uses, is steadily shrinking available inventory, and many of the remaining spaces come with functional limitations.
A clear divide has emerged between owners who are actively investing in and repositioning their office assets and those preparing properties for conversion. For tenants willing to consider suburban or fringe markets, a broader range of options become available.
PBN: Several Rhode Island municipalities are reevaluating zoning and land-use policies to encourage housing and mixed-use development. From your perspective as both an appraiser and broker, how might these efforts impact commercial property values and investment potential?
SWEENEY: From both an appraisal and brokerage perspective, thoughtful analysis of municipal zoning changes is critical. Any reevaluation of zoning and land-use policies needs to strike a balance between municipal goals and investor feasibility.
Increased density or expanded permitted uses can certainly encourage development and investment, but the real impact on property values will depend on how those changes are implemented, coupled with how they are received by the market. Until we see how these policies translate into actual projects and outcomes, it is difficult to draw a firm conclusion on impact.
PBN: What will define success for Rhode Island’s commercial real estate market over the next five years? Are there specific sectors – such as industrial, life sciences, or retail – that are particularly well-positioned for growth?
SWEENEY: Over the next five years, as vacancy tightens, we expect some upward pressure on rents, particularly in assets and locations that are well-positioned. Industrial will continue to be a leading sector, led by Quonset and similar large-scale developments across the state.
In Providence, particularly in the Jewelry and Education districts, continued institutional investment is supporting new life sciences and research facilities, which should contribute to long-term demand. The efforts are aimed at creating opportunities for growing companies to remain and expand within Rhode Island, aligning with the goals set forth by cooperating organizations.