After months of muted deal volume and pricing uncertainty, commercial real estate activity is stirring again. A new Colliers report finds that improved liquidity, stronger fundamentals and rising lending activity are encouraging more owners to test the market. Buyers, meanwhile, are stepping back in as the bid-ask gap narrows, providing the clearest signs of renewed transaction momentum in over a year.
Combined, these factors set the stage for a better overall market, Colliers suggests. The firm noted that buyers increasingly seek broker opinions of value to guide decisions, while more assets are being brought to market thanks to increased confidence in valuations and supportive capital markets. CMBS continues to underpin larger deals, and fundraising has picked up after a quieter stretch, signaling deeper liquidity across multiple property classes.
Notably, multifamily remains a focus for both buyers and lenders. The sector posted a 5.2% cap rate at the end of 2025 as supply-side pressures eased, though several Sun Belt metros still face elevated deliveries. Colliers notes that new housing production "remains challenged."
Single-family homes are seeing slower price appreciation and more sellers withdrawing listings when price expectations aren't met, prompting a growing number of homeowners to turn to rentals—adding competitive pressure to multifamily markets. Distress is emerging as delinquencies rise and special servicers assume a more active posture.
In the office sector, occupiers continue to favor top-tier space, reinforcing a divide between high-quality assets and everything else. Cap rates stand at 7.5%, with pricing up 2% year-over-year.
Transactions have picked up through partial-interest sales and CMBS financing, partially filling the gap left by trophy trades. Colliers observed that new construction largely centers on "build-to-suit" or "highly preleased" projects, while conversions are thinning vacant inventory. Although distress will remain a factor, lenders are prioritizing short-term and note sales over property takebacks, helping sustain market liquidity.
Industrial investors are also back in motion. With a 5.2% cap rate and flat pricing, the sector is attracting institutional capital on both the buy and sell sides. Reduced development and steady absorption are expected to lower vacancies and boost rent growth, making underwriting projections more favorable.
Colliers reports that industrial continues to draw the largest share of institutional bids and sellers are preparing new offerings as 2026 unfolds.
Retail is gaining momentum, trailing only office in year-over-year volume gains. Cap rates held at 6.5% at the end of 2025 as pricing advanced 5%. Investor allocations are ticking up, led by grocery-anchored centers noted for resilient foot traffic and consistent rent rolls.
Colliers highlights that limited new supply, low vacancy and rising rents are positioning retail as one of 2026's more balanced investment categories. Still, consumer spending remains split by income level, with inflation weighing on value-oriented shoppers even as upscale retail continues to strengthen.
Hospitality remains subdued compared with other major asset classes, ending 2025 at an 8.3% cap rate and with slower volume growth. Colliers attributes lagging performance to cost and rate pressures that have kept revenue per available room below inflation-adjusted benchmarks.
The sector continues to show a K-shaped recovery—luxury properties outperform while economy hotels struggle—but improved liquidity has stabilized pricing and helped restart refinancing activity.
Colliers expects more transactions to emerge in 2026 as pricing transparency, capital flow and credit availability align more closely than at any point in the past two years. While not all pricing gaps have closed, the surge of new listings suggests that confidence and competition are returning to commercial real estate.
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