Commercial Real Estate Deal Growth Stalls: What Professionals Need to Know for 2026
Image courtesy of Cameron Academy
Commercial real estate investors tapped the brakes in October, delivering the first year‑over‑year slowdown in nearly two years and raising new questions about pricing expectations, interest rates, and what 2026 might hold for dealmakers. According to a recent report from Mortgage Professional America, the drop reflects a deepening disconnect between buyers and sellers — one shaped by persistent rate pressure and policy uncertainty.
A Market Caught in a Stalemate
Kevin Fagan, head of CRE capital market research at Moody’s, described the shift as less of a downturn and more of a “stalemate.” After a year of strength — especially across industrial and multifamily sectors — October marked the moment when the U‑shaped recovery from 2023’s lows began dragging.
Despite the slowdown, the month still brought in approximately $24.4 billion in sales, roughly 70% of October 2019 levels and above 2024 volumes. Yet transaction momentum has cooled sharply since 2023 as the cost of capital reshapes underwriting standards and reduces leverage across CMBS structures.
Multifamily Pulls Back While Hotels Push Forward
Multifamily — the darling of early‑2025 dealmaking — saw volumes fall 27% year‑over‑year in October. Many properties still trade above historical pricing, showing that investors value stable, income‑producing assets but want clearer rate direction before making aggressive offers.
Hotels, however, are telling a different story. Hospitality was the only sector to post higher year‑over‑year growth, up roughly 6%. A standout example: the New York Edition hotel at 5 Madison Avenue, purchased by Kam Sang Company for $231.2 million — a striking case of adaptive reuse and revitalized demand.
Similar wins at properties like the Woolworth Building highlight how conversions continue breathing life into once struggling office assets.
Office Sector: Discounts, Distress, and New Demand Drivers
Office investors are navigating both tough realities and fresh opportunities. The sale of Sotheby’s headquarters to Weill Cornell shows how medical and life‑science tenants are becoming essential in filling outdated space. Meanwhile, New York Life’s acquisition of a distressed Manhattan tower at nearly half its 2015 pricing reveals institutional appetite for discounted yet promising assets.
These shifts hint at a potential floor forming for office valuations — not a rapid rebound, but a healthier stabilization as we approach 2026.
Commercial Mortgage Originations Surge
Even as deal flow cools, mortgage activity is heating up. The Mortgage Bankers Association reported a 36% year‑over‑year jump in commercial and multifamily mortgage originations during Q3 2025, driven by a remarkable 181% surge in office lending.
Still, today’s lending climate is “volatile” and “unpredictable,” with strong preferences for industrial and multifamily over troubled office space.
Why This Matters for Professionals — and How Education Helps
For real estate, mortgage, finance, and insurance professionals, this shifting environment demands sharper analysis, stronger financial literacy, and a deep understanding of capital and market cycles.
Cameron Academy provides industry‑leading training for real estate, mortgage, insurance, finance, and more. Whether you’re beginning your professional journey or sharpening competitive skills, continuing education gives you the edge needed to thrive in evolving markets.
As the market awaits clarity on rates, pricing, and risk, informed professionals will be first to identify — and capitalize on — emerging opportunities in 2026.
More Articles
Getting licensed or staying ahead in your career can be a journey—but it doesn’t have to be overwhelming. Grab your favorite coffee or tea, take a moment to relax, and browse through our articles. Whether you’re just starting out or renewing your expertise, we’ve got tips, insights, and advice to keep you moving forward. Here’s to your success—one sip and one step at a time!
In a landmark decision, the court has preliminarily approved settlement agreements in the commission lawsuits involving real estate companies RE/MAX and Anywhere Real Estate. The agreements require RE/MAX to pay $55 million and Anywhere Real Estate to pay $83.5 million. As part of the settlements, both companies will implement significant policy and practice changes, including the elimination of the requirement for agents to be members of the National Association of Realtors. This change will provide agents with more flexibility and independence in their business practices. The settlements have far-reaching implications for the real estate industry, fostering a more dynamic and customer-centric real estate market.
The housing market saw a remarkable increase in housing starts and permits in October, pointing to a positive industry trend. This surge suggests a growing demand among Americans for homeownership, prompting builders to respond by ramping up their construction efforts. However, builder confidence has been somewhat dampened by elevated mortgage rates. The housing market's performance varied across different regions in the United States, highlighting the diverse nature of the housing market and the various factors influencing construction trends.
CUSO Home Lending has implemented Dark Matter Technologies' advanced Empower loan origination system, revolutionizing the credit union lending process. The Empower system streamlines loan applications, automates document collection and verification, and facilitates seamless communication between borrowers, loan officers, and underwriters. With robust security measures and full compliance with industry regulations, the system ensures the protection of sensitive information. This move highlights the importance of embracing digital transformation in the lending industry.
United Wholesale Mortgage (UWM), a leading wholesale lender in the mortgage industry, has launched a new initiative offering no-cost appraisals on 1-0 temporary rate buydowns. This strategic move aims to attract more brokers by covering up to $600 of the appraisal cost on all conventional and government-backed home loans. Temporary rate buydowns allow borrowers to pay a lower mortgage rate during the initial period of their loans, making homeownership more affordable. This limited-time opportunity until March 31 provides brokers with a unique value proposition for their clients. Ready to explore the benefits of UWM's temporary rate buydowns and no-cost appraisals? Connect with UWM today.
Mark Willis has made a significant leadership change by returning as the CEO of Keller Williams, a leading player in the real estate industry. This news marks a triumphant comeback for Willis, who previously served as the CEO of Keller Williams from 2005 to 2014. Armed with extensive experience and a proven track record, Willis aims to steer Keller Williams towards continued success and navigate the challenges facing the real estate industry. This article will delve into Willis' career history, the growth of Keller Williams under his leadership, and the current landscape of the real estate market.
A recent lawsuit in Texas has sent shockwaves through the real estate industry, shedding light on alleged collusion among individual brokers, real estate teams, and large corporate brokerages. The lawsuit, filed by the QJ Team and other plaintiffs, accuses these entities of artificially inflating real estate agent commissions. The real estate industry has been rocked by a series of commission lawsuits in recent years, but the QJ Team lawsuit stands out due to its comprehensive list of defendants. The QJ Team lawsuit alleges that the defendants engaged in collusion to artificially inflate real estate agent commissions, thereby restricting competition and harming consumers. The plaintiffs claim that these entities conspired to set and maintain high commission rates, limiting the ability of homebuyers and sellers to negotiate fair prices. If proven true, these allegations could have far-reaching consequences for the real estate industry in Texas.
