Welcome to the topic “2026 CRE Market Outlook: From Resilience to Optimism in the CRE Market“
The U.S. commercial real estate (CRE) market is entering a transformative time. After a year defined by caution and uncertainty, the narrative for 2026 has officially shifted from a period of resilience to one of optimism.
This newfound confidence is being fueled by a combination of AI expansion, job growth, and a strategic pivot in how corporations and consumers interact with commercial spaces.
The Office Sector: A Tale of Two Tiers
The national office recovery is being defined by an overall “flight to quality” that is resulting in a two-tier office market.
High-quality Class A properties are seeing a surge in demand, characterized by rising rents and falling vacancies. While conversely, older Class B and C buildings continue to face declines, gradually being earmarked for conversion to alternative uses (i.e. residential).
The demand for high-quality Class A properties is manifesting in strong positive absorption across key national markets.
“We are seeing a Super Class A effect: as the top-tier buildings reach capacity, larger companies are being forced to look at standard Class A and “Class B plus” options, sparking a chain reaction of leasing activity in those secondary tiers.” – Bill Himmelstein
Industrial Stability and the “Broker Gap”
The industrial market, which saw explosive growth in 2022 and 2023, is finally stabilizing toward healthy, pre-pandemic norms. While the pace of new supply has slowed, demand remains steady, driven by the “triple threat” of e-commerce, manufacturing, and AI infrastructure.
However, the industrial sector is currently a “tale of two products.” The highest vacancy rates for industrial properties are for spaces 250,000 square feet or more. While businesses seeking mid-sized footprints—specifically between 50,000 and 200,000 square feet—are finding that the market remains incredibly tight, as supply for spaces within that square footage is low.
“With vacancy rates in this specific segment hovering at a lean 3%, the necessity of an expert broker has never been higher for businesses looking to secure functional space.
Retail’s Secret Weapon: The Experience Economy
While many feared the “death of retail” at the hands of e-commerce, 2025 shows that retail occupancy rates remain strong, driven by two primary anchors:
- Grocery-Anchored Centers: Essential services that provide consistent foot traffic.
- Experiential Retail: Activities that simply cannot be replicated online.
The rise of “experiential retail”—which includes everything from high-end salons to immersive entertainment venues—is currently carrying the retail market.
Experiential retail and grocery stores require a physical presence and consumers prefer these in-person venues to utilize services, which provides a hedge against digital competition.
With inflation stabilizing and interest rates ticking downward, the 2026 outlook for retail is strong, fueled by a consumer base that values connection over commodity.
A Market Realigned
The 2026 projections signal a clear turning point in the CRE market. The “wait-and-see” approach of businesses in previous years is being replaced by strategic expansion and forward projections.
Whether it is the tech-driven demand for office space or the consumer-led revival of physical retail, the CRE market is proving that physical locations with quality and utility that foster connection and collaboration remain the key drivers of business acceleration.
Also read: The Amazon Effect: The Corporate Shift to ‘Return-to-Office’
TAGS