Cushman & Wakefield Sees Momentum, Optimism Ahead for CRE Market

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Cushman & Wakefield, New York, released its 2026 outlook, predicting that the commercial real estate sector will enter the new year with “renewed momentum, clearer visibility and growing optimism.”

“As we head into 2026, the tone has shifted meaningfully,” said Kevin Thorpe, chief economist at Cushman & Wakefield. “There is still risk on both sides of the outlook, but we’ve moved past the peak levels of uncertainty, and confidence in the CRE sector is building. Capital is flowing again, interest rates are moving lower, and leasing fundamentals are generally stabilizing or improving. If 2025 was a test of resilience, 2026 has real potential to reward it.”

2025 marked a turning point for the market, Cushman & Wakefield noted, with lending volume up 35% year-over-year, institutional sales activity up 17% year-to-date through October and a pricing reset providing more opportunities.

Looking at the office market, which has seen significant struggles in recent years, Cushman & Wakefield sees a “flight to quality.” Class A buildings in many markets are nearly fully occupied. New supply is going to be limited, with the construction pipeline at its lowest level in about 30 years–only 20 million square feet are expected to come online between 2026-2028. Premiums for quality space are expected to rise, the report said.

Industrial leasing saw its strongest quarterly absorption in over a year in Q3, and demand forecasts for 2026-2027 have been revised higher by 70 million square feet. New supply is projected to fall sharply, and the firm believes competition for land is intensifying among the data center boom.

For multifamily, absorption remains near record highs. Rent growth is forecasted to strengthen 5% by 2027, as new supply continues to fall.

And, retail fundamentals remain steady, with occupancy near long-run highs.

Looking to 2026, Cushman & Wakefield puts its baseline scenario at a probability of 50%, predicting continued economic expansion, easing inflation and a more supportive policy environment.

“With better visibility, capital confidence returning, and supply waves receding across several key asset types, the backdrop for commercial real estate in 2026 is the strongest it has been in years,” Thorpe continued. “The path ahead looks clearer, and the opportunities are broadening for both occupiers and investors.”