2026 Real Estate Outlook (w/o the BS)

We tracked down and simplified the nine most popular 2026 real estate outlooks so you don’t have to claw your eyes out reading them yourself.

Here are the major points and surprises:

1. The "Great Thaw" is finally here.

Well...It sure took its sweet time.

After years of boredom, just about every report agreed: transaction markets are reopening. The bid-ask spread has narrowed, and capital is moving off the sidelines, finally.

2. The "Retail Apocalypse" is officially over.

Why? Because the supply side died. They hasn’t been meaningful new retail development in a decade, so vacancy is at historic lows. Landlords have pricing power again. The survivors (grocery-anchored, high-end strip centers) are now monopoly assets with zero new builds.

3. The best AI trade isn't a stock.

It's real estate debt. The AI buildout is massive and front-loaded (cap-ex now, profit later). Even cash-rich tech companies will need to lever up to build the infrastructure. The "picks and shovels" play here isn't buying NVIDIA at 40x earnings. However, the Infrastructure Debt that is financing the construction could be lucrative.

I agree CRE debt should be compelling for the foreseeable future, but we are focusing on traditional real estate asset debt (multifamily, senior housing, retail etc.) vs. data centers given animal spirits will almost cause oversupply at some point.

If you’ve followed my writing over the years you know I focus heavily on the supply side of the investing equation. Demand is fickle, supply is math. If supply is constrained, you can just be directionally correct on demand and still do extremely well. Having to accurately predict future demand in an unpredictable world is investing on hard mode. I prefer stepping over one foot hurdles.

4. Office is...hiring?

Really? They might be talking their book, but Cushman Wakefield predicts a substantial rebound in office job growth in 2026. The "consolidation" phase of layoffs and shrinking footprints is largely over in their view. The trophy office discounts never really materialized, but if you can buy distressed "Class A-" assets at "Class B/C" prices, you might be buying at the exact moment the bleeding stops. Or not.

We are still largely avoiding office in our recommended fund investments given the following. The second we have a downturn a large percentage of CEOs will annouce above average layoffs so they can backfill with AI (or talent great at leveraging AI).

They’ve already largely paused hiring, therefore I think many executives would prefer to send the bottom 10-20% of performers packing, but are worried about ruining culture. An economic pullback - whenever it comes - would give them cover to pull this off.

5. The "Rent vs. Own" math is officially broken.

Apollo says it isn't just a cycle, it’s structural. The "American Dream" is a mirage for the median earner. They think the smart money is moving into the only affordable options left: hello Manufactured Housing and Student Housing. BTR (Build to Rent homes) would have been a 3rd option here, but that sector’s future is fuzzy given the President’s recent initiatives to block private equity ownership of homes.

6. The death of "Beta."

I've been banging on this drum for couple years. Operational alpha > financial engineering. It's a pro's market. Returns in 2026 will come from boots on the ground "hustle", actually improving properties, which is a good thing - most of the pretenders / charlatans have gone packing.

7. The "Diversification Mirage."

Several firms took a direct shot at the classic 60/40 portfolio. They argue that in a world driven by "Mega Forces" (AI, geopolitical rewiring), owning a broad index is no longer a "hedged bet", it's just a massive active bet on tech.

The real estate department authors of these reports here are probably just a tad bit biased / (the barber thinks you need a haircut!) but their collective recommendation: add real assets / real estate / debt to diversify tech heavy portfolios.

The Lazy 1031

I talk to a lot of real estate owners that are either:

A) tired of dealing with their properties or…
B) are winding down and trying to think through how to exit their portfolio efficiently.

If they are older or less concerned about maximizing IRR, and are more cash flow / downside focused - I usually recommend they simplify their life, pivot to real estate debt for income and not trade into another single deal (for a bunch of reasons detailed in the below video).

Click on the photo below for the video.

All systems go for the most interesting year in real estate since 2021.

Happy hunting in 2026.

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Investment strategies discussed may not be suitable for all investors. Past performance is not indicative of future results. All investments carry risk, including the possible loss of principal. Readers should consult their own tax, legal, and investment professionals prior to making any decisions.