Commercial real estate conditions are expected to improve in 2026, with tightening supply conditions and a renewed focus on asset quality shaping decisions for building owners and facility managers, according to CBRE’s 2026 U.S. Real Estate Market Outlook.
CBRE forecasts U.S. gross domestic product (GDP) growth will slow to 2 percent in 2026, joined by a softening labor market and inflation averaging 2.5 percent. However, commercial real estate investment activity is projected to rise 16 percent year over year, reaching $562 billion—nearly matching pre-pandemic averages. The bigger story for facilities professionals lies in constrained new construction, increasing pressure on existing buildings and a growing rift between high-performing assets and those falling behind.
Across most property types, CBRE expects a limited new supply of available commercial space in 2026. In the office sector, inventory removals from demolitions and conversions have outpaced new completions for the first time since tracking began, helping drive the first year-over-year decline in vacancy in more than five years. Demand continues to concentrate on newer, high-quality buildings with strong amenities, while older assets face rising vacancies and increased pressure to adapt.
That dynamic is creating both challenges and opportunities. High-performing buildings are seeing tighter availability and fewer financial breaks, while secondary properties may offer flexibility for renovations, adaptive reuse or repositioning. The report notes that early lease renewals and proactive planning will be crucial as quality space becomes harder to secure.
Additionally, retail properties are entering this year with relatively strong fundamentals but increasing differentiation. Grocery-anchored and open-air centers are expected to outperform other retail formats, supported by tight availability and limited new construction. Older malls and power centers may require significant capital investment to remain competitive – raising maintenance and upgrade considerations for owners and operators.
As for healthcare real estate, the report projects a sharp drop in new medical outpatient building (MOB) construction, with completions falling to the lowest level in more than a decade. Tight supply is expected to support stable vacancy and continued rent growth, while healthcare providers increasingly seek cost savings through outpatient facilities, second-generation space and conversions of obsolete office and retail properties.
Data centers remain a standout sector, with leasing activity expected to hit record levels this year. Power availability, delivery timelines and on-site energy solutions are now central to site selection, placing added emphasis on infrastructure planning, electrical capacity and long-term energy strategy for facility teams.
Ultimately, maintaining building quality, planning early for space needs and investing strategically in infrastructure will be essential for managers as markets tighten and occupiers become more selective.
Jeff Wardon, Jr., is the assistant editor of the facilities market.
