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Overview of Real Estate Trends for 2026

The LaSalle Investment Management has released its ISA Outlook for 2026, providing crucial insights into the shifting landscape of the Americas real estate market. After what felt like a repetitive cycle in the previous years, 2026 is anticipated to usher in a new phase characterized by stabilizing valuations, improved liquidity in the debt markets, and constrained new development activity. The report highlights that while initial conditions at the start of 2026 may appear similar to the previous couple of years, various economic and investment dynamics are poised to trigger a pronounced rebound in real estate activity.

Economic Landscape and Stability

The economic sentiment was tumultuous throughout 2025, yet resulting performance dynamics have proven more stable, setting the stage for a renewed real estate cycle. According to LaSalle’s North America chapter of the ISA Outlook, the economic growth expected in the US in 2026 will likely remain slightly below the trend but will manage to sidestep a full-blown recession. Indicators such as job growth and consumer spending reflected stability in the US, whereas Canada prolonged its challenges influenced by trade unpredictability.

Strengthening Capital Markets

A significant aspect of LaSalle's 2026 outlook is the recovery observed in debt capital markets. In 2025, commercial mortgage-backed securities (CMBS) and collateralized loan obligations (CLO) showed marked improvements. Strong inflows into private debt funds and revitalized refinancing activities have facilitated liquidity, enabling cautious but optimistic transaction movements. Notably, borrowing spreads tightened throughout the year, suggesting a building confidence in the markets. Although equity capital inflows remained relatively subdued, there are early signs that the situation could improve. Many institutional investors have adjusted their stance, as capital raised in previous allocations remains available for deployment, and appraisal metrics have begun stabilizing.

Sector-Specific Insights

The ISA report conveys a marketplace where limited supply and economic trends are becoming pivotal themes across various property types. LaSalle anticipates that fewer new development initiations due to escalating financing costs and stringent bank lending practices will lead to favorable conditions for occupancy and rental income across major property segments. Here’s a closer look at some notable categories:

Residential and Apartments

Surprisingly strong performance in the US apartment sector during 2025 indicates a continued trajectory of income growth surpassing inflation. Canadian markets are benefiting from demographic-related demand; particularly in Ontario, where new units are benefiting from rent controls.

Industrial Market Dynamics

The industrial property sector is expected to regain momentum, especially as tariff-related uncertainties decrease. Projections suggest declining availability rates alongside attractive acquisition pricing, especially for properties at or below replacement costs, which positions industrial real estate as one of LaSalle's top investment opportunities for the coming year.

Retail Sector Variability

Performance in retail remains inconsistent due to the diverse nature of markets and formats. While there are challenges on a sector-wide scale, select opportunities exist, particularly within grocery-anchored centers and specific high-street corridors in Canada. The report indicates that rental growth potential is currently underestimated in these spaces.

Office Market Stability

While the office sector demonstrated stabilization in principles during 2025, LaSalle remains skeptical about the relative value in this market, primarily due to burdensome capital expenditures and income concerns. Opportunities may arise for selective investors, but a widespread recovery is still not evident.

Specialty Sectors

There are promising prospects within niche categories such as affordable housing, senior living, and industrial outdoor storage. These segments are buoyed by consistent demand, demographics trends, and manageable capital expenditure requirements, making them appealing options for investment.

Conclusion and Future Outlook

Brian Klinksiek, LaSalle's Global Head of Research and Strategy, articulated that despite numerous challenges throughout 2025, the atmosphere for a new real estate cycle is emerging in the Americas. The collapse in supply pipelines and renewed debt market activity is ushering in a more positive investment climate. Richard Kleinman, head of Research and Strategy for the Americas, reinforces the outlook for 2026 as fundamentally stronger for selective investors, particularly in the industrial and multifamily sectors. With international capital flows likely increased by a weaker Canadian dollar, and as confidence begins to stabilize, LaSalle's insights set a promising horizon for 2026 in both US and Canadian real estate markets.