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Retail CRE markets mostly in recovery as office stays split

ConnectCRE, citing Integra Realty Resources, said more than 90% of retail markets are in recovery or expansion, while office markets remain evenly divided.

Reported · Written up by our desk · Industry

The U.S. commercial real estate recovery is diverging sharply by property type, according to Integra Realty Resources in its newly released 2026 Mid-Year Viewpoint Report, as covered by ConnectCRE.

ConnectCRE reported that more than 90% of retail markets surveyed are in recovery or expansion, but office markets are evenly split between recovery and recession. It also said multifamily performance is driven largely by local supply cycles, while industrial markets are concentrated in expansion and hypersupply phases.

Across all four sectors, the report points to a continued “flight to quality,” with modern, well located and specialized properties outperforming older or more commodity oriented assets. ConnectCRE added that speculative construction has slowed sharply.

The analysis cautions that modest rate cuts may not substantially improve transaction economics, given elevated long term borrowing costs and equity return requirements. Looking ahead, ConnectCRE said opportunities through year end and into 2027 are expected to remain concentrated in markets and assets where the basis, income growth and local demand support the investment case.

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