In the multifamily sector, delayed capital expenditures have become more common amid rising operating costs, elevated interest rates, expanded cap rates, and tighter access to financing. Owners are often postponing renovations, amenity upgrades, and system replacements to preserve cash flow, especially in markets facing softening rent growth or increased supply. While this strategy may provide short-term financial relief, prolonged deferrals can lead to tenant dissatisfaction, higher maintenance costs, increases in vacancy, and reduced property competitiveness over time.

Delayed Capital Expenditures (CapEx) in the office sector have become increasingly common as landlords face economic uncertainty, high interest rates, and weakened tenant demand (especially in class B and C properties). Many owners are deferring investments in building systems, amenity upgrades, and repositioning strategies to preserve cash flow amid declining occupancy and softening rental rates. While this short-term approach may ease financial pressure, it risks accelerating long-term asset deterioration and reducing competitiveness in a market where tenants are prioritizing high-quality, amenity-rich workspaces.

The hotel sector experienced widespread delayed CapEx following COVID-era travel restrictions, as operators prioritized liquidity during a period of unprecedented revenue loss. Property Improvement Plans (PIPs) were often deferred with brand approval, while high interest rates in the post-pandemic period further discouraged reinvestment. As a result, many assets now face a backlog of necessary renovations and upgrades, which could impact guest experience, brand compliance, and long-term asset value if not addressed in a timely manner. In an environment where hotel growth projections are flat to low for the foreseeable future, big injections of capital to cure PIP and deferred CapEx issues can be challenging to justify.

In the retail sector, delayed CapEx became widespread during and after the COVID-19 pandemic, as lockdowns and capacity restrictions drastically reduced foot traffic, tenant revenues. Many landlords deferred upgrades and repositioning efforts in response to tenant bankruptcies, store closings, lease restructurings, and uncertain cash flows. The number of store closures in 2020 was a record in recent years, and some are expecting that record to be surpassed in 2025. High interest rates in the recovery period have further constrained access to capital, making it difficult to justify major investments. Tenants struggling to perform in their core business tend to defer CapEx responsibilities under the terms of their leases. This delay has left some properties outdated or underutilized, potentially impacting leasing momentum and long-term asset performance. It also shifts Tenant CapEx responsibilities back the Landlord in the worst cases.