As the industry worked through those issues in 2025, it looked ahead to 2026, when it expects to emerge from those headwinds stronger. Many factors will drive this acceleration, according to one senior economist.
Xander Snyder (pictured top), senior commercial real estate economist for First American, said the first factor that will propel the sector in the new year is liquidity.
“Increased liquidity will be a major driver in 2026,” Snyder told Mortgage Professional America. “As buyers and sellers align more consistently on pricing and as more owners are compelled to act when loans mature, transaction volumes are likely to rise.”
Lower rates, lower returns
Snyder said the commercial space will enter a new cycle in the year ahead. While rates are still higher than pandemic lows, they are aligned with historical mortgage rates when excluding COVID-era rates. While these lower rates could drive deals, he said not to be surprised if equity returns are lower.
“While the new CRE cycle is here, it will look different than recent ones,” Snyder said. “Interest rates might feel high compared to 2021, but they are still near multi-decade lows, as are cap rates. Limited valuation tailwinds, something not seen since the 1990s, mean there will be an increased focus on income in this cycle and, therefore, efficient operations.
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