RCLCO: Commercial Real Estate Firms Adjust to Today’s Environment

(Image courtesy of Erik Mclean/pexels.com)

RCLCO, Bethesda, Md., released its 2026 CRE C-Suite Outlook, finding that the industry is more firmly settling into a “new normal.”

Firms are maintaining disciplined cost structures, refining operations and pursuing growth opportunities where risk-adjusted returns justify investment. Transaction volume across most asset classes is rising from post-pandemic lows, but those activities are occurring within more stable organizational environments than in an era of broad expansion.

The average number of executed transactions increased from 4.8 deals in 2025 to 7 in 2026. Executives also generally expect conditions to continue improving over the next year, but are less enthusiastic than they were this time last year. Most respondents forecast capital markets will remain relatively stable, with slow incremental improvement.

Nearly 40% of respondents say sourcing debt has gotten easier; 42% say raising equity has gotten more challenging.

Almost all respondents reported profitability over the past year, and only 5% reported negative operating margins.

Margin compression has reversed–43% of firms held margins flat and 35% improved. That compares with 40% reporting compression in 2025.

But, nearly one-third expect overhead expenses to remain unchanged over the next year, and another 43% forecasts increases of less than 10%.

About two-thirds of firms report no significant change to their staffing models. About one-third of executives say that attracting and retaining top talent has become somewhat or significantly easier.

Appetite for mergers and acquisitions has fallen sharply. Two-thirds of firms are not considering M&A activity this year, up from about half last year.

And, AI adoption remains a key focus. A staggeringly small amount–3%–report no meaningful AI use and nearly a quarter are engaged in enterprise-wide development.