Commercial real estate markets entered 2026 with greater pricing clarity and improved capital market functionality, even as economic and policy uncertainty continues to shape investor decision-making. Transaction activity and debt capital availability strengthened through late 2025, narrowing bid-ask spreads and supporting more consistent price discovery across most asset classes.
Market conditions remain differentiated by sector and asset quality. Industrial and multifamily sectors are moving toward balance following periods of outsized supply and demand shifts, while office performance continues to diverge sharply between high-quality and challenged assets. Retail and specialty sectors benefit from limited new supply and stable occupancy, supporting improved investor interest and transaction activity.
Across property types, supply discipline, moderating construction pipelines and increased lender participation are helping stabilize valuations and restore confidence. As capital re-enters selectively, market participants are positioning for improving fundamentals and more active investment markets as 2026 progresses.
Key Takeaways:
- Capital markets activity strengthened, improving pricing visibility and transaction momentum across most sectors.
- Cap rates remained generally stable, with movements increasingly tied to asset quality and market selection.
- Supply discipline and slowing development pipelines are supporting long-term valuation stability.
- Industrial and multifamily sectors are transitioning toward balance as deliveries slow and absorption stabilizes.
- Office performance continues to diverge, with strong demand for premier assets and repositioning opportunities emerging for challenged properties.
- Retail and specialty sectors benefit from limited new supply, supporting occupancy and investor interest.
