Commercial Real Estate Outlook 2026: Analysts See Signs of Recovery

Core Insights - The commercial real estate sector is showing signs of improvement as analysts and industry executives express optimism for 2026, driven by positive economic growth and easing trade concerns [2][3]. Market Outlook - Jones Lang LaSalle (JLL) reports a more positive outlook for 2026, citing improving market fundamentals such as positive economic growth, moderating inflation, and lower interest rates contributing to a stable operating environment [2]. - The real estate capital markets have strengthened significantly in the second half of 2025, with expectations for continued activity in 2026 as lender appetite broadens across property sectors [3]. Sector Performance - Office and industrial space leasing is projected to increase globally, particularly in major markets like the U.S., India, and the UK, indicating a recovery in demand [5]. - JLL's CEO noted that both occupier and investor clients are motivated to transact, reflecting broad-based activity across capital markets and improvements in large deal activity [6]. Technology Impact - The AI infrastructure boom is expected to drive demand for data centers, with leasing demand strengthening across various markets and property types in 2026 [4]. - American Tower and Equinix reported strong quarterly results, with American Tower benefiting from increased demand for mobile data and Equinix closing over 4,400 deals, reflecting continued demand for latency-sensitive workloads [7][8]. Construction Trends - Deloitte's 2026 Commercial Real Estate Outlook indicates cautious optimism, noting that global investment volume declines have reduced for six consecutive quarters, with the first year-over-year increase since mid-2022 observed in early 2025 [9]. - Construction activity outside of data centers is expected to remain soft into early 2026, but easing policy uncertainty and federal tax incentives may encourage a rebound in construction spending later in the year [10].