Following a challenging year, the outlook for 2026 is more positive. Improving market fundamentals, including positive economic growth across most major markets, easing trade concerns, moderating inflation and lower interest rates will contribute to a more stable operating environment. And yet, the convergence of economic, technological, and social forces leaves organizations across the globe navigating a complex and evolving environment, with the commercial real estate industry on the precipice of substantial – and exciting - transformation . 

This Outlook examines six critical forces reshaping commercial real estate: the imperative for efficiency in a higher-cost environment; intensifying supply shortages across property types; ‘experience’ as the new value driver in real estate; the maturation of AI implementation beyond pilot programs; the convergence of buildings with power systems; and the democratization of commercial real estate investing. Each represents both challenge and opportunity for real estate actors.

For real estate capital markets, the environment strengthened notably in the second half of 2025 and momentum is expected to build further in 2026. We expect debt markets to remain very active and for lender appetite to continue to broaden across property sectors. Over the next year we anticipate the competitiveness of investor bidding to rise further as the real estate investment cycle gains momentum, resulting in an expansion of transaction volumes through the year. The AI infrastructure boom will continue to drive demand for data centers, while the Living sector will remain the world’s largest investment sector, with growing investor demand across all forms of housing. Markets with deep product pools will continue to be active and we expect growing demand in a range of countries, from Australia to Spain.

Meanwhile, leasing demand is expected to strengthen across many markets and property types in 2026. Office and industrial take-up are projected to increase globally, with growth in most major countries including the U.S., India and the UK. The impact of lower new construction will become progressively larger in the office sector as occupiers looking for new, large-block space face fewer options and higher rental rates. In supply-constrained locations, shortages of quality space – particularly acute in Tokyo, New York and London - will mean demand broadens beyond the top end of the market. Industrial and logistics deliveries are also falling globally, which will contribute to contracting vacancy as leasing increases. 

Across the global built environment, ‘experience’ has become the decisive factor shaping how people choose where to live, work, shop and spend their time. However, buildings and places are not keeping pace, with ‘experience obsolescence’ risks to assets emerging. While more than two-thirds of people worldwide now expect high-quality, personalized and wellness-enhancing experiences to be integrated into every type of space they engage with, up 5% from 2024, the undersupply of Grade A quality stock coupled with aging and obsolete stock in key U.S. and European markets, will focus experience factors as a fundamental investment driver in 2026.

The energy system cannot expand quickly enough to meet accelerating demand and the implications are landing at the asset level. Energy costs are proportionate to as much as 26% of rental value, making efficiency essential for competitiveness. But the opportunity for real estate extends beyond cost avoidance. With rising price volatility, outage risks and surging demand, buildings can increasingly help address these pressures through distributed energy solutions. 

In markets such as California and New Jersey as well as Germany, strong policy frameworks and elevated electricity prices are already driving rapid uptake of rooftop PV and behind-the-meter storage as occupiers seek stability and resilience. In China, building owners and occupiers are accelerating rooftop-solar adoption to secure predictable power and hedge against grid variability. The trajectory is clear and these markets are at the forefront: buildings are moving from passive consumers to active energy resources — and assets able to integrate onsite solutions can unlock revenue uplift of 25% to 50% compared to rent.