2026 Forecast Sees 16% Increase in CRE Investment Activity

Annual U.S. GDP growth will slow to 2.0% in 2026, with softening labor market conditions and marginally lower inflation averaging 2.5%, CBRE forecasts. Despite these challenges, commercial real estate investment activity is expected to increase by 16% in 2026 to $562 billion, nearly matching the pre-pandemic annual average.

In its U.S. Real Estate Market Outlook 2026 report, CBRE says total returns will be income-driven. Asset selection and management will be key drivers for returns. Cap rates for most property types are expected to compress by five to 15 basis points this year.

CRE leasing activity will continue recovering in 2026 from its 2024 low, with the underlying performance and timing of recovery varying across sectors, asset types and markets, says CBRE. In both the office and industrial sectors, a flight to quality at the expense of older assets is forecast.

The report delves into the outlook for key property types along with 16 local markets.

Source: ConnectCre