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Commercial real estate steadies as investors and occupiers turn selective
ConnectCRE, citing CBRE, says occupier demand stayed strong in the first half of 2026 as investors leaned toward well-located assets and stronger funding conditions supported deal activity.
In the first half of 2026, commercial real estate investors and occupiers showed continued concern, but demand and fundamentals improved even as inflation stayed sticky and the Federal Reserve kept interest rates steady, according to ConnectCRE.
ConnectCRE notes that tariff and trade uncertainty kept pricing pressure elevated, while the Middle East conflict affected oil prices and the labor market softened despite unemployment remaining low. The outlet also pointed to a CBRE newsletter saying occupier demand remains strong and investment activity has increased, with supply dynamics varying by property type.
ConnectCRE said office and retail construction are near historic lows, industrial supply growth is leveling off, and apartment starts are declining. It added that the tighter supply is beginning to shape tenant behavior, with occupiers planning further ahead to secure early renewals and available space.
On asset strategy, ConnectCRE reported that increased bank financing is giving owners and investors more opportunities to repurpose obsolete properties into higher-quality assets, with interest in well-located second-generation facilities that could be converted into data centers. The outlet also cited CBRE saying AI adoption could boost productivity and shift how occupiers evaluate space, supporting ongoing demand for skilled workers even if it does not remove the need for offices.