Market Summary 10.20.25
Leading Economists' Predictions for 2026
Commercial real estate deal flow is showing signs of revival as several converging forces begin to unlock capital and confidence across the market. After an extended slowdown marked by high borrowing costs and valuation gaps, the landscape is shifting toward renewed activity.
According to the video, economists project modest but positive U.S. GDP growth in 2026, paired with inflation that remains elevated yet somewhat controlled. LinkedIn+2Marcus & Millichap+2
Interest rates are expected to stay range-bound rather than spike upward, which supports more predictable financing conditions. Facebook+2LinkedIn+2
This macro backdrop — moderate growth, steady inflation, stable rates — is helping revive investor confidence and making acquisitions and refinancing more tenable.
At the same time, liquidity is re-entering the market. Institutional investors, private equity, and 1031 exchange buyers who had paused allocations are now seeking opportunities to deploy capital before competition intensifies.
The video highlights that with rates stabilizing and economic visibility improving, capital-holders are less hesitant to move.
That “dry powder” built up over previous years is now poised to be deployed as the risk/reward balance appears more favorable.
In parallel, the underlying fundamentals of many property types—particularly industrial, multifamily, and necessity-based retail—remain strong, supported by stable rent growth, high occupancy, and limited new construction.
Although not detailed heavily in the video, the broader research context from Marcus & Millichap suggests these property types are best positioned under moderate growth scenarios.
The video implies that sectors with structural tailwinds benefit most when economic growth is steady but not booming.
However, the recovery will likely be uneven. Certain segments—such as office and speculative/higher‐leverage developments—may continue to face headwinds, while stabilized assets and well-located properties are expected to lead the resurgence.
The “range-bound” rate scenario means strong underwriting discipline remains important. The economistic forecast does not suggest a free-for-all environment.
Some asset classes may lag because they still deal with shift in demand (e.g., office) or higher risk profiles (new development).
Looking ahead, the next phase of the cycle appears poised for acceleration. If interest rates continue to trend lower and capital markets stabilize, transaction volumes could meaningfully rebound over the next several quarters. For investors, this environment presents a window to reposition portfolios—acquiring quality assets at recalibrated pricing before increased liquidity and competition drive valuations higher. Those who act early may be best positioned to capture the upside of a market on the verge of renewed deal flow.
The video underscores that downside risks remain (e.g., inflation shocks, policy misstep), but the consensus is tilted toward “slow-and-stable” not “rapid slide.”
In that kind of environment, getting into the right assets earlier—before the crowd—can be a strategic advantage.