Commercial real estate is proving more resilient than many expected in 2026, even as geopolitical tensions and higher interest rates reshape the economic outlook, according to CBRE’s latest market forecast.
While the firm no longer expects the 10-year Treasury yield to fall below 4% this year, it says investment activity remains on pace to reach approximately $605 billion, a 16% increase from 2025. Capitalization rates are now expected to remain largely stable through the rest of the year rather than compress, making income generation a bigger driver of returns.
Office Market Continues to Improve
Office fundamentals continue to strengthen as building demolitions and office-to-residential conversions outpace new construction for a second consecutive year. Prime office vacancy has declined, while technology companies are increasing long-term office commitments despite ongoing AI adoption.
According to CBRE’s 2026 Americas Office Occupier Sentiment Survey, 64% of technology companies plan to expand their office footprint over the next three years.
Industrial and Data Centers Lead Growth
Industrial real estate remains one of the strongest-performing sectors, with leasing activity expected to reach a record 1 billion square feet this year. CBRE attributes the growth to manufacturing reshoring, increased third-party logistics demand, and companies seeking higher-quality facilities.
Demand for data centers also continues to surge, fueled by AI infrastructure expansion. The firm expects approximately 80% of under-construction data center capacity to be preleased before completion.
Retail fundamentals remain healthy with historically low availability, while the multifamily sector is showing signs of recovery after stronger-than-expected job growth in the first half of the year.
AI and Long-Term Demand Support Outlook
Although inflation, elevated interest rates, and geopolitical instability continue to create uncertainty, CBRE says several long-term trends are supporting commercial real estate demand. These include AI infrastructure investment, reshoring of manufacturing, growing healthcare needs driven by demographics, and ongoing barriers to homeownership.
The firm expects these structural drivers to continue creating investment opportunities, particularly for high-quality assets with stable income streams and long lease terms.
