If 2024 was about shock, 2025 was about consequences.
This year did not deliver a clean recovery story. It delivered something more useful: a sharper operating reality.
Capital stayed selective. Pricing remained stubborn. And the market’s winners were defined less by what they bought and more by how they underwrote, financed, insured, powered, and operated what they already owned.
Across every major theme we covered in 2025, one message converged. CRE entered a performance era, not a multiple-expansion era. That shift fundamentally changes what CRE strategy means heading into 2026.
Repricing Matured as Transparency Became a Competitive Edge
The repricing cycle did not end. It matured.
As cap rates reset and refinancing pressure built, deal velocity depended on proof rather than narrative. The bid-ask gap persisted largely because assumptions were still anchored to yesterday’s valuations. The sponsors who moved fastest were willing to show their work:
- Current appraisals
- Clean rent rolls
- Realistic exit caps
- Scenario-based cash flow models
Transparency stopped being a best practice and started functioning like currency. It reduced friction, accelerated diligence, and helped lenders get comfortable when comfort was in short supply.
The market made one thing clear. It will forgive bad news faster than unclear news.
Debt Returned, but Discipline Set the Terms
Lenders started moving again, but the structure mattered more than the headlines.
Credit conditions improved at the margins, but underwriting discipline held. Structures converged around lower leverage, heavier documentation, and meaningful reserves, with bridge lending reserved for business plans that could withstand stress. Private credit stepped in where banks would not, offering flexibility in exchange for rigor.
Going into 2026, being bankable will not mean being big. It will mean being disciplined.
Insurance Became a Deal Variable, not a Line Item
One of 2025’s biggest disruptors was insurance.
Premium volatility and, in some markets, availability itself pushed insurance into the center of underwriting. Owners modeled multiple renewal scenarios. Lenders paid closer attention to carrier behavior and climate exposure. Strong sponsors treated resilience upgrades as financial strategy, as insurers quietly priced preparedness into real dollars.
In 2026, insurance will continue to behave like a second interest rate. One that varies by geography, building quality, and operational readiness.
Power Turned Into a Competitive Filter
If 2025 delivered a single infrastructure lesson, it was that the grid is no longer a given.
Electrification, AI-driven demand, and climate volatility made reliable power a competitive advantage. Assets began to be priced by load capacity, outage risk, interconnection timelines, and on-site resilience options such as solar, storage, and microgrids.
Energy shifted from operating expense to strategic variable. In 2026, power readiness will increasingly determine which projects get built, which sites get leased, and which markets keep winning.
Data Centers Quietly Reshaped Land Strategy
Data centers were not just an asset-class story in 2025. They were a land story, a power story, and a planning story.
Industrial corridors began competing directly with digital infrastructure. Parcels near substations and fiber routes gained scarcity premiums. The office conversion conversation widened carefully as a small subset of campuses with the right characteristics entered feasibility discussions.
The implication goes beyond growth in data centers alone. Digital infrastructure is influencing how CRE values land, entitlements, and utility access across multiple property types.
Office and Retail Proved That Experience Still Matters
Office did not come back as a monolith. It came back as a choice.
With hybrid work making the commute optional, leasing decisions became more personal and more brand driven. Tenants leaned toward environments that support culture, wellness, and identity.
Retail delivered a parallel lesson. The recovery was driven by strategy rather than nostalgia. Mixed-use integration, lifestyle leasing, and experience-first formats turned places into destinations. Malls increasingly looked less like shopping containers and more like redevelopment platforms.
The shared signal was clear. Space must earn presence now.
AI Scaled Fast, but People Were the Constraint
AI adoption accelerated across underwriting, forecasting, and site selection. Tools layered traffic patterns, sentiment signals, infrastructure data, and climate risk with increasing sophistication.
The constraint was not technology. It was adoption.
Firms with training, governance, and cross-functional pilots moved forward. Firms without them stayed stuck in experimentation. In 2026, AI will reward firms with adaptable people rather than firms with the most tools.
Industrial and Alternatives Rewarded Capability
Industrial demand in 2025 was less about square footage and more about performance.
Throughput, automation readiness, power capacity, and resilient logistics corridors mattered more than ever. Nearshoring reinforced the value of speed to market and redundancy.
Diversification also became more intentional. Secondary markets gained credibility where infrastructure and permitting velocity aligned. Alternative sectors such as cold storage, EV-supportive sites, media production, and outdoor storage drew interest because they track durable economic activity rather than traditional leasing cycles.
The caveat was universal. Operator expertise and underwriting precision were non-negotiable.
The 2026 Setup: Operations Becomes Strategy
By late 2025, the market’s center of gravity shifted decisively toward execution.
Expense growth, insurance pressure, power constraints, and slower rent acceleration all point to the same conclusion. The next cycle’s outperformance will not come from buying right alone. It will come from operating right.
The 2026 playbook is clear:
- Underwrite with transparency and stress-tested realism
- Treat power and insurance as strategic inputs
- Invest in operational discipline as the primary lever
- Use AI as infrastructure and train people to wield it
- Diversify with precision rather than trend-chasing
2025 did not hand the industry an easy win, but it did provide a clearer standard. The firms that internalize that standard now, before liquidity fully returns, will be the ones setting the terms when the market finally loosens again.
