The US commercial real estate market in 2025 was plagued by uncertainty. High interest rates and shifting economic policies tested the market's resiliency and kept many investors on the sidelines. According to a new market outlook report from Colliers, 2026 could mark a significant inflection point for the sector, with renewed energy and a clearer path toward growth.
"2026 is positioned as a reset year, marking a transition from uncertainty to stability," says the real estate services firm's senior director of national research, Steig Seaward. "Fundamentals are rebalancing as financing conditions improve, occupier demand strengthens and investor confidence returns. Leasing and sales activity are gaining momentum, supported by narrowing bid-ask spreads and clearer pricing floors."
Investor Confidence Improving
As CRE investors tread carefully through lingering inflation and a constrictive labor market, the report indicates that the industry is moving toward steadier conditions.
Seaward says that despite previous Federal Reserve cuts, long-term yields remain above 4%, which has kept underwriting disciplined. He adds that the improved cost of capital environment, highly liquid debt markets, and expectations for gradual rate reductions in 2026 are creating tailwinds for increased deal feasibility.
Specifically, the retail sector continues to be resilient, due to selective expansion, experiential formats and the strength of well-capitalized tenants. The report notes that retail vacancies are steady with rents increasing approximately 1.5%, making it one of the most stable performers in commercial real estate.
In office, Seaward predicts that vacancy will dip below 18%, while rent growth is expected to trend up 1–2%. Distress is still concentrated in the sector, creating selective opportunities for investors and more incentive for repositioning and adaptive re-use strategies.
He also predicts that artificial intelligence will continue to be one of the most powerful transformative forces shaping business strategy and investment decisions in 2026. Seaward says that adoption is shifting rapidly from pilot projects to enterprise-scale integration as organizations chase efficiency, cost savings and competitive advantages.
Spotlight on Industrial
The growing importance of artificial intelligence — and online more broadly — has led to an evolution in industrial, with data centers now becoming a major asset type in the sector. The report explains that demand for available space remains insatiable, but historically low vacancies and electricity constraints are creating barriers to entry.
For the industrial sector overall, Seaward sees a new growth cycle upcoming as construction bottoms and demand strengthens. He expects vacancies to peak near 7.6% in early 2026 as excess supply is absorbed. Furthermore, reshoring activity and increasing automation add upside while companies diversify their sourcing strategies, the report notes.
Looking Ahead: Key Trends
Seaward expects continued uncertainty around political and economic factors to hamper the real estate sector, with geopolitical shocks, inflation resurgence, recession and unexpected policy shifts presenting the biggest wildcards. He notes that this may lead to extended transaction timelines, more conservative underwriting standards and restrained development.
"Many investment firms will favor flexibility and optionality over long-term commitments," says Seaward, slowing deal flow and muting investment until greater policy clarity emerges.
As this "reset" year moves toward increased stability, according to the report, optimism will persist.
"With investors and lenders adapting to a more disciplined yet steady environment, the industry can fundamentally enter the year with renewed confidence," Seaward adds.
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