2026 commercial real estate M&A outlook
How investors are adjusting to a new deal environment
Commercial real estate mergers and acquisitions (M&A) spent much of 2025 in a holding pattern. Deal activity lagged expectations, constrained by rate uncertainty and widening valuation gaps. Still, the market continues to evolve. Capital is abundant, timelines are tightening, and investors are beginning to accept a new baseline for pricing. In 2026, the question is no longer if activity will return, but where conviction will drive deals forward.
Key takeaways
- Interest rate stability, more than rate cuts, could unlock delayed commercial real estate M&A activity in 2026.
- Capital remains available, but investors are deploying it selectively as valuation expectations continue to evolve.
- Data centers and digital infrastructure continue to attract strong demand, with deal structures shifting toward partnerships and joint ventures.
- Office and residential sectors are diverging, with deal activity driven by asset quality, location, and local market conditions.
2025 in review
After a slow start and high expectations, 2025 proved to be a reset year for commercial real estate M&A. Global deal value fell 57% to $88.7 billion and deal count dropped 74% as many transactions stalled amid financing uncertainty. Even so, capital did not disappear; rather, it became more selective—concentrating in fewer, larger, and more deliberate deals.
A rise in deal selectivity
Global M&A activity contracted sharply in 2025, with deal count falling from 3,286 to 846 transactions. But rather than signaling a lack of interest, this shift points to a market where investors prioritized conviction over deal volume.
The power of scale
While deal volume declined, average deal size more than doubled to $255 million. In the United States, average deal size reached $300 million compared to $224 million globally, underscoring continued demand for large, US-centric opportunities.
Mixed signals in property sales
Global property sales remained near multi-year lows, with transaction activity rising just 3.5% and dollar volume up 8%. In contrast, US property sales showed early signs of recovery, with volume increasing 23% and transactions up 12% after two subdued years. Even so, M&A activity stayed constrained, with US deal count falling 82%, reflecting a market still working through valuation gaps and delayed transactions.
2026 commercial real estate M&A trends
As real estate M&A enters 2026, the focus is shifting from waiting to positioning, with emerging trends pointing to where activity may arise and how investors can prepare to act.
Wild cards to watch in 2026
Several wild cards could reshape the M&A landscape in 2026. Power constraints and regulatory pressures may redirect data center growth toward energy-rich regions, while pushing operators to secure capacity through generation investments or partnerships, blurring the line between real estate and energy infrastructure. At the same time, the pace of office conversions may depend on public incentives, accelerating activity in some markets while leaving others stalled.
Policy shifts in single-family rentals may also influence capital allocation, as changes to institutional ownership rules could reshape underwriting and portfolio strategies, either encouraging investment or prompting a pullback.
Positioning for the next cycle
In 2026, commercial real estate M&A may benefit those who are ready to act, not those waiting for perfect conditions. Capital is available, but competition for high-quality assets remains intense, and success will depend on how well investors align strategy with today’s market realities. Explore our full report to see where opportunity may surface next and how to best position for it.
Nathan Florio
Jonathan Keith
