2026 Commercial Real Estate Outlook: Strong Fundamentals Amid Economic Uncertainty

J.P. Morgan reports a bright outlook for commercial real estate in 2026, citing strong fundamentals in the multifamily and industrial sectors alongside a recovery in certain office markets. Transaction volumes and equity fundraising improved throughout 2025, setting the stage for increased activity in the coming year. However, the industry recently faced challenges from a 43-day federal government shutdown that impacted community development and housing programs.

Michelle Herrick, Head of Commercial Real Estate at J.P. Morgan, noted that the market is currently strong from both a capital and fundamental standpoint. The firm anticipates that the stability of these fundamentals will help the industry navigate persistent economic uncertainty.

The recent government shutdown specifically hindered Community Development Financial Institutions (CDFIs) and entities relying on federal resources. While some administrative layoffs were rescinded, the disruption created new hurdles for housing programs and community-focused real estate investments.