2026 Outlook points to clearer visibility, firmer fundamentals, and broader market opportunities.
NEW YORK, December 4, 2025 — Cushman & Wakefield (NYSE: CWK) today released its U.S. Outlook 2026, revealing that after a year defined by extraordinary macroeconomic uncertainty, the U.S. commercial real estate (CRE) sector is entering 2026 with renewed momentum, clearer visibility and growing optimism across both leasing and the capital markets landscape.
Despite aggressive tariffs, a volatile policy backdrop, tightening immigration flows and episodes of financial market stress in 2025, the U.S. economy proved far more resilient than expected. Real GDP growth is projected at 1.9% in 2025 and 1.7% in 2026, buoyed heavily by the acceleration of AI-driven investment, which accounted for more than half of all GDP growth in 2025.
“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.”
Clear Tailwinds for Capital Markets
After two years of constrained liquidity, 2025 marked a turning point. Debt costs eased, lenders re-entered the market, and institutional capital returned, supporting a broad-based revival in deal activity.
- Debt availability and pricing improved sharply, with lending volume up 35% year-over-year.
- Institutional sales activity increased 17% year-to-date through October.
- Pricing has largely reset, presenting the market with compelling opportunities for yield and income generation.
Investors are also seeing more motivated sellers, both from portfolio recalibration and selective distress, creating attractive entry points.
“CRE has already gone through a major price correction, and we are just now emerging from it,” said James Bohnaker, Principal Economist at Cushman & Wakefield. “And importantly, the sector is not overbuilding heading into next year, and if anything, we are underbuilding in certain areas, which will help support the fundamentals under most economic scenarios. CRE is now fairly priced, and that will likely attract even more capital as investors rebalance their portfolios and expand exposure to real estate.”
Leasing Markets: Quality Space is Tightening
Across major U.S. markets, elevated amounts of vacant space in office and some industrial markets presents tenants with leverage to negotiate favorable lease terms. However, the window to capitalize on market dislocation may be closing. Occupiers are making more decisive commitments and prioritizing high-quality, well-located space, and with limited new supply expected in the next few years, premiums for quality space are expected to rise. The same is true in retail, where the market has been consistently undersupplied amid diverse tenant expansion post-pandemic.
Office: Flight to Quality Accelerates
- Class A buildings in many markets are nearly fully occupied, driven by tenant preference for modern, amenitized environments.
- The U.S. office construction pipeline is at its lowest level since the 1990s, with just 20 million sq. ft. expected to deliver between 2026–2028.
- Key markets, including San Francisco, San Jose, Austin, New York, Atlanta, Dallas, and Nashville, posted strong positive absorption in 2025, supported by AI expansion and diversified job growth.
“For large office users looking to secure high-quality space, the message is clear: if you find the right space, act decisively,” said Bohnaker. “There is strong demand for new, high-quality space and not enough of it to go around. And given the limited construction pipeline, it’s going to get even tighter.”
Industrial: Demand Rebounds as Tariff Uncertainty Moderates
Industrial leasing regained strength in late 2025, with the strongest quarterly absorption in over a year.
- Demand forecasts for 2026–27 have been revised 70 million sq. ft. higher than midyear estimates.
- New supply will fall sharply, expected at roughly half the pace of 2022–25.
- Competition for land is intensifying as data center developers and industrial users target similar power-rich sites.
Market-level performance varies widely. Coastal port markets face cost pressure and softening rents, while inland hubs such as Dallas, Chicago, Phoenix, Atlanta, and Reno continue to record rent growth and robust occupier interest.
Multifamily: Structural Strength Continues
Multifamily absorption remains near record highs, propelled by:
- High mortgage rates and low for-sale inventory
- Demographics favoring renter household formation
- A collapse in new construction starts, down two-thirds from peak
- Rent growth is forecasted to strengthen to 5% by 2027, as new supply dries up.
Retail: Stable, with Opportunities in Grocery-Anchored and High-Quality Malls
Retail fundamentals remain steady, with occupancy near long-time highs and construction muted. Even with flat-to-negative headline absorption in 2025 due to big-box bankruptcies, leasing velocity, mark-to-market rent gains, and mall-sector performance have all improved.
A Market Turning the Page
Cushman & Wakefield’s baseline scenario, with a 50% probability, foresees continued economic expansion, gradually easing inflation, and a more supportive policy environment as tariff-related adjustments stabilize and the Fed lowers interest rates toward a neutral 3% by late 2026.
“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,” said Thorpe. “The path ahead looks clearer, and the opportunities are broadening for both occupiers and investors.”
Click here to read the U.S. 2026 Outlook Report.