Commercial real estate has moved back to the top of SitusAMC’s quarterly investor preference survey, suggesting that investors increasingly view property as a source of stability during an unsettled economic period.
The finding comes from the company’s second-quarter 2026 ValTrends research. Although the improved sentiment does not yet translate into robust transaction volume, it indicates that capital remains interested in commercial real estate and may be positioning for better buying opportunities.
Economic and geopolitical uncertainty has contributed to CRE’s renewed appeal. Investors facing volatility in stocks and bonds may value real estate’s income-producing potential and longer investment horizon. Cash has also remained attractive as market participants wait for greater clarity on interest rates and the economy.
Buyers and Sellers Are Moving Closer Together
The Federal Reserve’s interest-rate increases beginning in 2022 created a significant gap between buyer expectations and the prices sellers were willing to accept. As a result, many owners chose to retain their properties rather than bring them to market.
Holding remains the dominant strategy, but SitusAMC’s latest survey found that preferences for buying and selling were equal for the first time in several years. That balance could be an early sign that buyers and sellers are developing a more consistent view of current property values.
More realistic pricing expectations would help remove one of the primary obstacles to transactions. However, financing costs and broader uncertainty continue to discourage many investors from moving forward.
Capital Is Available, but Investors Are More Selective
Debt and equity capital remain more constrained than historical norms. At the same time, underwriting has become increasingly focused on individual properties and their immediate surroundings.
Broad assumptions about an entire asset class or metropolitan area are no longer sufficient. Investors and lenders are examining tenant quality, lease terms, property condition, neighborhood-level demand and the competitive position of each asset.
This heightened scrutiny reflects the growing variation in performance among properties. Changes in workplace patterns, consumer behavior, logistics and technology are affecting office, retail and industrial assets differently—even within the same market.
Interest Is Expanding Beyond Multifamily
Multifamily has dominated investor preferences in recent years, while industrial properties and data centers have benefited from e-commerce growth and expanding demand for artificial intelligence infrastructure. The latest findings, however, show investors considering a wider range of property types.
Office properties received virtually no preference in earlier surveys, commonly attracting only 0% to 2% of responses. That figure jumped to 22% in the fourth quarter of 2025 before settling at 11% in the second quarter of 2026.
Lower office valuations have created potential acquisition opportunities, particularly for properties that can be repositioned or converted to residential use. Loan maturities and distressed ownership situations are also bringing assets to market at prices that may appeal to investors willing to accept additional risk.
Retail interest increased even more sharply. Approximately 21% of respondents favored retail during the quarter, compared with 9% a year earlier. The change suggests that investors are reassessing retail properties based on stronger fundamentals in selected locations and segments.
Interest Rates Continue to Limit Transactions
Improving sentiment has not overcome the effects of elevated borrowing costs. SitusAMC reported that average monthly CRE transaction volume has been approximately $42 billion since the Federal Reserve began raising rates in June 2022. During the preceding year, monthly volume averaged approximately $192 billion.
Labor-market conditions add another layer of concern. Job growth has slowed substantially, while low unemployment partly reflects a smaller labor force. Weaker employment growth can eventually reduce demand for apartments, office space and retail services.
The outlook for the remainder of 2026 is therefore mixed. Investors appear more comfortable with commercial real estate than they did during the early stages of the interest-rate adjustment, and expectations between buyers and sellers are becoming better aligned. Nevertheless, high financing costs and economic uncertainty are likely to keep many transactions on hold.
If interest rates decline and economic conditions become more predictable, the market could respond quickly. Until then, investment activity will likely remain highly selective, with capital favoring properties that offer strong fundamentals, defensible income and pricing that adequately reflects current risk.
Source: Commercial Observer
