When Deloitte released its 2025 Commercial Real Estate Outlook a year ago, the anticipation was for a global CRE recovery, “buoyed by an expected return of deal activity, more favorable lending terms, greater industry collaboration, and advances in artificial intelligence.”
What a difference a year makes.
In the 2026 Commercial Real Estate Outlook, Deloitte authors acknowledged that last year’s survey results and forecasts had not “exactly played out that way,” due to trade and regulatory uncertainties and an overall volatile macroeconomic environment. In the introduction to the 2026 Commercial Real Estate Outlook, the report’s authors, based on survey responses, noted a slight pullback in optimism compared to last year’s report.
Still, despite concerns over international trade policies and impact on financial decisions, “our respondents only ranked that 9th out of 12, below conditions like capital availability, changes in tax policy, and elevated interest rates,” said Sally Ann Flood, Deloitte & Touche’s Partner, U.S. Real Estate Sector Leader and U.S. A&A Real Estate Leader.
Flood, one of the report’s authors, told ConnectCRE that capital availability moved to the top of the list of concerns impacting global real estate leaders. Behind that, elevated interest rates and cost of capital worried survey respondents, as well as currency volatility and tax policy changes.
The AI Challenges
On the technical side, the 2026 outlook pointed out that:
- 19% of respondents believe their organizations are in the early stages of AI
- 27% are experiencing challenges with AI integration; Flood said that 16% reported such obstacles last year
The report explained that the AI integration curve shift possibly occurred because “last year’s survey may have reflected hype, which could have led to overly high expectations for 2025.” Flood added that the response could also be due to technical issues, a lack of expertise, or cultural resistance to change.
Speaking of change, she explained that the industry is shifting from AI hype to practical solutions that offer measurable returns. “While excitement and intrigue about AI’s potential remains high, industry players are now taking a more calibrated approach, methodically identifying and zeroing in on use cases that deliver real value,” Flood said.
Where the Money Goes
Survey respondents explained that the top targets for commercial real estate investment included India (13%), Germany (10%), the U.K. (9%) and Singapore (9%). Meanwhile, 16% of respondents considered the U.S. as their #1 target for investment, while “the United States remains the top source of outbound global investment capital.”
Additionally, the report noted that global fundraising remains on track, with private credit funds accounting for a third of new capital. “With relatively high interest rates and debt set to mature in the next few years, investors and asset managers may look to capitalize on emerging opportunities in the real estate debt markets,” the report said.
More Good News
“Many leaders still see CRE as a potential safe investment, given its performance during similar periods of uncertainty in the past,” the report pointed out. And while there was a slight dip in sentiment, the survey respondents remained optimistic regarding their revenue and spending expectations, as well as CRE fundamentals.
Partnerships are also becoming increasingly important in investments, with Flood noting that such alliances can help diversify investment channels while providing greater access to commercial real estate capital.
“We believe the future of CRE investment will be an increasingly collaborative effort. CRE asset management is becoming a scale-driven business with leaders in the space forging both cross-border and domestic partnerships that span public and private markets,” she added.
Now, the Crystal Ball
The report noted that the early-mover advantage among CRE investors may be nearing its end. “The early-mover advantage was something we hinted at in last year’s outlook, and given some early indications on property fundamentals so far through 2026, we’ve already likely passed the true market bottom,” Flood pointed out.
She added that investment activity is increasing, property pricing declines are nearing positive territory, while leasing fundamentals remain strong. “While the window is not entirely closed, we do think those who aimed to time the bottom may have missed that chance,” she commented.
Still, all is not lost for those just entering the game. Flood suggested that a balance of pragmatism, agility and some risk-taking could generate favorable entry points now, “compared to down the road when more bidders re-enter.”
The report highlighted that flexibility and selectivity are crucial when making capital allocation decisions. Leaders should avoid knee-jerk reactions and focus on medium- to long-term convictions and outlooks. Other suggestions included a focus on sub-asset and non-traditional asset types that could work in lower-growth environments, such as telecommunications, healthcare, and data centers.
The post Deloitte 2026 CRE Outlook: Guarded Optimism Amid Uncertainty appeared first on Connect CRE.