Yields are poised to edge lower in the U.S. across commercial real estate property types in 2026, according to the latest forecast from CoStar. The updated forecast is powered by an increase in transaction volume and firming prices. In the third quarter of 2025, sales volume increased 43% year over year, reflecting broader deal activity across all property types.
“The industrial and multifamily sectors have already experienced cap rate compression since the latter half of 2024, particularly for high-quality assets where vacancies have peaked and rent growth is starting to accelerate,” said Chad Littell, mational director of U.S. capital markets analytics at CoStar Group. “Office and retail cap rates, on the other hand, have largely moved sideways, but the upward pressure on yields is easing and the outlook suggests similar movement or potentially lower levels ahead.”
Other factors, including improved liquidity and tightening corporate bond spreads, also suggest lower cap rates.
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