The many and varied outlook reports from just about every commercial real estate firm out there, as well as related consulting and financial services firms, use words like “new equilibrium” (Colliers), “firmer fundamentals” (Cushman & Wakefield), “ongoing recovery” (KBW) and “signs of price stability” (CoStar).

Looking at specifics for the year ahead, CRE leaders are slightly less optimistic than they were ahead of 2025, according to a Deloitte survey of 850 global chief executives and their direct reports at major real estate owner and investor organizations across 13 countries. Eighty-three percent of respondents said they expect their revenues to improve by the end of 2026 compared with 88% last year. Fewer respondents said they plan to increase spending, while more expect to keep spending flat. Still, 68% said they anticipate higher expenses in 2026.

Most respondents said they do expect the cost of capital to improve, and growth is expected across most asset classes. Overall sentiment is down from last year but well above that of 2023, according to the Deloitte survey.

“Capital Markets Reawakening” – that’s the headline from Colliers, which says pricing has found a floor and deal velocity is rising. Colliers forecasts a 15% to 20% increase in sales volume in 2026 as institutional and cross-border capital reenters the market.

Capitalization rates seem to be ready to move lower next year, according to a forecast from CoStar. Its data is already showing hints of this in the multifamily and industrial sectors, where vacancies have peaked and rent growth is picking up.

CoStar also notes deal activity is picking up, with third-quarter sales volume up more than 40% year over year, and banks are “easing back into commercial real estate lending,” according to the report. 

Bond markets are following suit, showing new appetite for risk. CoStar points to the narrowing spread between government and corporate bond yields to roughly 1 percentage point (well below the historical average), “typically a precursor to greater real estate investment and firming prices.”

This tracks with the Cushman & Wakefield outlook, which also notes that in 2025 debt costs eased, lenders reentered the market and institutional capital returned, “supporting a broad-based revival in deal activity.” 

Lending was up 35% year over year, institutional sales activity increased 17% through October, and pricing has “largely reset, presenting the market with compelling opportunities for yield and income generation,” Cushman & Wakefield found. 

The office market is now widely believed to have bottomed, and assets are showing early signs of price stability.

Vacancy rates are expected to drop below 18% as more tenants return to the market, leverage expiring leases and prioritize hospitality-driven workplaces that support hybrid work, according to Colliers.

There will continue to be a flight to quality in office, as Class A buildings in many markets are now nearly fully occupied. Office construction is also at its lowest level in more than three decades, according to Yardi.

Cushman & Wakefield forecasts continued growth in San Francisco; San Jose, California; Austin, Texas; New York; Atlanta; Dallas; and Nashville, Tennessee, which posted strong positive absorption in 2025, supported by AI expansion and diversified job growth.

“For large office users looking to secure high-quality space, the message is clear: if you find the right space, act decisively,” said James Bohnaker, principal economist at Cushman & Wakefield. “There is strong demand for new, high-quality space and not enough of it to go around. And given the limited construction pipeline, it’s going to get even tighter.”

Industrial has also seen a huge drop in construction, down 63% since 2022, according to the Colliers report. Vacancy is peaking and net absorption is set to jump to 220 million square feet, as reshoring, manufacturing and data centers fuel demand.

Retail is already undergoing a major shift in how and where companies are leasing space, according to Brandon Svec, national director of U.S. retail analytics at CoStar. 

He points to nearly 26 million square feet of ground floor retail leased in nontraditional properties in the first three quarters of 2025, including multifamily, student housing, hospitality and office. 

Retailers are embracing smaller footprints, with the average retail lease signed over the past four quarters falling below 3,500 square feet for the first time since CoStar began tracking this in 2016. This is being driven largely by restaurant and service operators such as Starbucks, Chipotle, Chick-fil-A, Jersey Mike’s, Dunkin’ and McDonald’s, according to Svec, who noted the growing appeal of walkable, mixed-use retail environments over traditional big-box formats. He does have a warning though.

“Significant uncertainty remains around the impact of tariffs on an already fragile consumer. While suppliers and retailers have largely absorbed these costs to date, many have signaled that price increases are imminent. With consumers already showing some signs of spending fatigue, tariff-related price hikes could further strain household budgets and dampen discretionary spending,” Svec wrote in a report. 

Multifamily rents are starting to ease, as a record level of new supply continues to make it through the pipeline. 

“Multifamily has led investment sales volume since 2015, and there are no signs of this changing. However, its share of total volume is expected to ease somewhat as investors allocate more capital to office, data centers, and retail,” according to the Colliers report.

Data centers have been the darling of 2025, with demand significantly outpacing supply. Deloitte called the sector, “a clear bright spot in the U.S. commercial real estate landscape.” It pointed to nine major global markets where 100% of the new construction pipeline is already fully pre-leased. 

Data centers do, however, face headwinds in financing, grid capacity, zoning and local politics. 

“Friction is building as communities push back on data center development. A few projects have already been abandoned, and more are expected to be shelved in 2026,” according to the Colliers forecast.

Public-to-private REIT transactions and portfolio mergers are likely to dominate in the year ahead as listed valuations lag private market pricing, according to a report from PwC. That will be driven by considerations of scale, governance credibility and cost of capital. 

“Expect accelerated M&A as capital concentrates, AI exposes inefficiencies, and platforms converge—real assets are entering a new phase defined by intelligence, integration, and scale-driven opportunity,” wrote Tim Bodner, global real estate deals leader at PwC.

As for the real estate investment trust stocks, they were the real laggards of 2025, but could be poised to outperform in 2026, according to a forecast from Nareit, the REIT industry association. It points to a divergence between stock market valuations and REIT valuations and an ongoing divergence between public and private real estate valuations. 

“These will close, and one or both could happen in 2026. If they do, we expect REITs to outperform based on our own historical analysis and their ongoing strong operational performance and balance sheets,” the report said.