Capital Markets Update: A More Disciplined Cycle Takes Shape in 2026
The US commercial real estate market is transitioning into a new cycle driven by fundamentals and focused execution, with a more disciplined approach expected in 2026. The market has adjusted to higher interest rates, and valuations have reset, creating opportunities for investors.
The US commercial real estate market is entering a new cycle driven by fundamentals and execution. The sudden increase in interest rates in 2022/2023 caused a shock, but the market has adjusted, and valuations have reset. The US economy remains resilient, supported by consumer spending and corporate profits, but job growth has moderated. Interest rates remain a key influence, with longer-term rates underpinning valuation and capital structures. Real estate values reached a low in early 2024 and have since recovered modestly. The current environment presents a compelling entry point for certain strategies and asset categories, with opportunities driven by clearer pricing and improved income visibility. Returns are expected to be driven by net operating income growth and durable cash flow, with a focus on asset quality and operational execution.
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