Seyfarth Shaw’s 11th Annual Real Estate Market Sentiment Survey finds CRE leaders signaling optimism and renewed deal momentum

New York, NY Seyfarth Shaw LLP released its 11^th Annual Real Estate Market Sentiment Survey, revealing sustained optimism across the commercial real estate industry as investors continue to move forward in a market defined less by caution and more by pragmatic decision making. Despite ongoing concerns around interest rates, construction costs, and geopolitical instability, 86% of surveyed CRE executives view 2026 as a year of opportunity, signaling confidence that the market’s positive momentum will continue.

The report captures the perspectives of CRE executives across the United States, highlighting the top market concerns, investment priorities, and key drivers of change shaping the year.

Paul Mattingly, national chair of Seyfarth’s real estate department, emphasized in the report that while familiar concerns persist, the industry is recalibrating effectively:

“Interest rates haven’t disappeared as a concern, but they’ve become part of the assumed backdrop. Geopolitical instability and tariff uncertainty are increasingly viewed as real-world risk affecting supply chains, insurance, construction costs, and capital movement,” Mattingly said.

Over the past five years, the CRE industry has navigated a pandemic that rewrote work rules, an interest rate shock that froze transactions, political transitions reshuffling policy priorities, rising costs, and increasingly volatile geopolitics. The industry, through it all, has remained resilient, adapting where necessary and remaining patient when possible.

Among the survey’s key findings:

Steady Optimism Amid Uncertainty: 86% of respondents view 2026 as a year of opportunity versus 14% retrenchment. That’s nearly identical to 2025’s 87%-13% split, consistent with two years of above-80% optimism. Interest rate stabilization and emerging pricing consensus are sustaining confidence even as macroeconomic conditions remain challenging.

A Turning Point in Office Conversions: Office-to-residential conversion emerged as the #2 most impactful trend (57%) selected by respondents. This increased interest may result from governmental incentives and regulatory relaxation aimed at addressing housing shortages, potentially outweighing the cost of overcoming physical barriers.

Data Center Domination: 85% of respondents identified data center development as having the greatest impact on CRE in 2026. Nevertheless, only 30% see data centers as a top three investment opportunity for their organizations, down from 41% in 2025. In addition, 46% of respondents anticipate only moderate expansion for data center investment. Their views align with recent headlines highlighting constraints on development including energy demands and localized community considerations.

Balanced Asset Allocations: While interest in traditional asset classes like multifamily, industrial, and retail remains high, no single class dominates investor interest like multifamily did in 2025. Multifamily remains a top sector, but is now tied with industrial, with each attracting interest from 47% of respondents. Investors are increasingly interested in specialty investments, with interest in senior housing jumping to 21% from 13% in 2025, and interest in healthcare facilities rising to 24% compared to 15% in 2025. Responses suggest a more balanced allocation compared to 2025, where multifamily was predominant.

Rate Consensus: Stronger consensus formed around two Fed rate cuts in 2026, with 45% expecting a 26-50 basis point decrease. Predictions are more aligned than in 2025, suggesting the market has largely “priced in” the current rate environment.

Distressed Assets Declining: The number of respondents planning to allocate to distressed assets has fallen year-over-year since 2024. Nearly 40% of respondents anticipate no allocation to distressed assets in 2026, and most of those investing in distressed assets anticipate allocating 10% or less of the portfolio to the category. This suggests many distressed assets have been absorbed or restructured, signaling stronger market momentum than in 2024 or 2025.

Methodology
In January 2026, Seyfarth surveyed real estate executives — which included owners, developers, investors, asset managers, brokers, lenders, and consultants — via email to gauge their top concerns for the coming year. 123 respondents took the survey.

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