As we close out 2025 and look ahead to 2026, the real estate landscape is poised for continued dynamic shifts. Investors will be closely watching monetary policy, with the Fed expected to implement gradual rate cuts through 2026, aiming for a 3% funds rate by year-end. However, persistent inflation could delay or limit monetary easing, while a sharper slowdown in hiring might prompt more aggressive cuts. At the same time, fiscal deficits and debt exceeding 100% of GDP are likely to continue exerting upward pressure on Treasury yields and long-term rates, even as policy loosens.

A broad rebalancing of fundamentals is underway as financing conditions stabilize, occupier demand strengthens, and confidence returns. Leasing and sales are gaining momentum as capital reengages and pricing expectations move closer to equilibrium. With investors and lenders adapting to a more disciplined yet steady environment, the industry can enter the year with renewed energy and a clearer path toward growth.

Against that backdrop, here are some of the key asset class trends we’re tracking for the year ahead. You can explore these insights and more in Colliers’ 2026 Outlook Report.

Capital Markets

Cap Rate Segmentation Will Widen: Capital is readily available, and the past cycle has driven market-level cap rates for industrial and multifamily properties closer together. Investors will focus on risk-adjusted returns and underlying local dynamics, leading to a widening of cap rate spreads between markets.

Multifamily

Housing Shortages: Despite the recent surge in development nationwide, numerous markets lack available units, particularly in middle-market housing priced at or below median household income rather than in the luxury segment. Investors are increasingly discussing selective development, a trend likely to gain momentum in 2026.

Office

AI’s Impact Growing in Multiple Ways: AI companies are significantly influencing the U.S. office market. Since 2024, the industry has been a key driver of leasing in the San Francisco Bay Area, and several major tenants have absorbed large blocks of vacant space. However, nationwide, as recent college graduates struggle to find jobs and AI capabilities begin to fulfill many entry-level functions, companies may need less space.

Industrial 

Global Supply Chains Are Being Restructured: Industrial occupiers will continue to reshape global supply chains in 2026 due to geopolitical, labor, technological, sustainability, and operational pressures. Companies are diversifying sourcing strategies and relocating production closer to end markets to reduce dependence on any single region. U.S. imports from Mexico surpassed those from China in 2023, as Mexican labor costs fell below China’s. At the same time, Latin America and lower-cost Asian nations are emerging as key manufacturing hubs amid persistent U.S.–China trade tensions and a fragmented semiconductor supply chain.

Retail

The Barbell Economy: Retail growth is increasingly polarized, with value and luxury brands gaining ground while mid-tier retailers face mounting pressure. More than one-third of consumers (34.4%) plan to spend less in 2026, yet a majority (65.6%) expect to maintain or increase spending. Retailers emphasizing affordability, private labels, and clear value, or catering to resilient high-income demand, will be best positioned to sustain momentum.

Hospitality 

Generative AI Will Change How Hotels Are Booked: When online travel agencies (OTAs) emerged, they changed how consumers selected lodging, and by extension, how hotels allocated their advertising. Widespread access to generative AI has started a new revolution; the use of AI tools for travel planning almost doubled from 2024 to 2025, increasing from 10% to 18%, according to Oxford Economics, led by Millennials and Generation Z. As consumers increasingly use AI for trip planning, AI-integrated platforms and hospitality marketers have a growing opportunity to capture market share.

Data Centers

Investors Are Full Throttle: Capital is searching for ways to play the AI boom, unlocking significant investment from private credit, infrastructure, banking, insurance, private equity, and public markets. Investors are becoming increasingly nimble and creative. Watch for a pickup in CMBS activity in 2026.

Life Sciences

Scientific & Technological Evolution: The life sciences sector continues to be reshaped by emerging technologies and evolving research priorities. Advances in technology, such as the rise of AI-driven drug discovery and development and shifts in the most promising and profitable research areas, serve as prime examples. These changes influence not only where growth occurs — favoring cities with specialized talent and ecosystems — but also the types of facilities companies require.

Healthcare

Increased Investor Demand: Medical office buildings remain among the most sought-after assets in healthcare, combining stable occupancy with reliable long-term income. Average occupancy reached 92.5% in 2025, with several markets surpassing 95%, driven by strong demand from hospitals and physicians. Investor demand is supported by aging demographics; the population aged 65 and above is projected to grow from 61 million in 2024 to 70 million by 2030, driving healthcare spending toward $2 trillion. With limited new supply and rents rising nearly 2% year over year, MOB fundamentals remain exceptionally strong, ensuring continued investor momentum throughout 2026.