The NAIOP Research Foundation has released a new report indicating that commercial real estate lending and transaction volumes are increasing across property types, with asset valuations described as largely stabilized. Drawing on a mix of economic, capital markets and property-level data, the research points to a market that is moving through a transitional phase rather than a period of outright dislocation.
According to the report, banks have stepped up their lending activity to commercial properties, even as conduit lenders have reduced their presence. This shift underscores a changing composition in debt capital sources, with traditional bank balance sheets playing a more active role while securitized channels retrench.
The analysis finds that federal agencies, government-sponsored enterprises and mortgage-backed securities investors together remain the primary buyers of loans backed by multifamily properties. That dynamic reinforces the importance of agency and related capital in supporting liquidity for the apartment sector, particularly as other funding channels adjust to interest rate and risk conditions.
On the equity side, private buyers are highlighted as the dominant force in overall property acquisition activity. Institutional investors, by contrast, are described as more targeted, concentrating their allocations on industrial and multifamily assets. This emphasis reflects where institutional capital currently perceives more resilient fundamentals and clearer demand visibility.
The report characterizes U.S. commercial real estate markets entering 2026 as being in a transitional environment marked by improving liquidity and moderating inflation, while rate-driven volatility remains a persistent challenge. These conditions shape both underwriting assumptions and investor risk appetite, influencing how quickly capital moves off the sidelines.
Distress, according to the research, is not evenly distributed across the market. Instead, it appears concentrated in investment-grade properties and loans securitized through commercial mortgage-backed securities structures. This pattern suggests that certain higher-profile or institutionally owned assets and CMBS pools are bearing a disproportionate share of stress as debt costs reset and valuations adjust.
The report also notes that construction activity has moderated in the industrial and multifamily sectors. A slowdown in new development may help temper future supply in these property types, with potential implications for occupancy and rent trajectories over time, particularly if demand conditions remain stable or improve.
Overall, the NAIOP Research Foundation’s findings portray a commercial real estate capital markets landscape where lending and transaction volumes are recovering, valuations have ceased their sharp downward adjustment, and liquidity is improving, even as volatility, sector-specific distress and tighter construction pipelines continue to shape investment and lending strategies.
