Commercial real estate investors are well-capitalized and actively searching for opportunities, yet many are finding that suitable acquisitions remain difficult to secure.
New research from SitusAMC points to a growing imbalance between the amount of available capital and the supply of investments that meet buyers’ current standards. In a market still shaped by elevated interest rates, inflation concerns and geopolitical uncertainty, investors are concentrating on high-quality properties in desirable locations with dependable operating histories.
That selectivity is contributing to a slower transaction market. SitusAMC’s survey of institutional investors found that 70% preferred to hold their existing assets during the first quarter of 2026, up from 63% in the previous quarter. The share favoring acquisitions declined from 30% to 26%, while the preference to sell fell from 7% to 4%.
Debt markets are also highly competitive. Capital is available for both senior and mezzanine financing, but lenders have tightened their standards and are applying greater scrutiny to property fundamentals, sponsorship and historical performance. Strong competition among lenders is compressing spreads and improving pricing for the most attractive borrowers and assets.
Meanwhile, private real estate credit funds continue to raise money, including follow-on funds receiving renewed commitments from existing investors. However, finding enough suitable loans to place that capital has become increasingly challenging. Some investors are responding by exploring specialized sectors with potentially higher yields, including data centers, senior housing, skilled nursing facilities and student housing.
Conditions differ considerably among the traditional property sectors.
Multifamily continues to attract significant investor interest, with 60% of surveyed investors identifying apartments as their preferred property type, compared with 44% in the preceding quarter. National rent growth is relatively flat, however, and recently developed Sunbelt markets—including portions of South Carolina—continue to work through elevated apartment supply.
Industrial demand remains steady, although vacancies created by the recent wave of construction are restraining near-term rent growth. With development activity slowing sharply, vacancy rates could begin declining as existing space is absorbed.
Retail properties are benefiting from limited construction, improving occupancy and healthy tenant sales. Grocery-anchored and lifestyle centers are among the strongest-performing categories, encouraging investors who may currently be underallocated to the sector.
Office performance remains sharply divided. Modern Class A and A+ buildings in major markets are generating leasing interest, while older Class B properties continue to face significant challenges. The life sciences segment is also under pressure in several markets following a period of aggressive expansion.
Overall property values have remained relatively stable, but capital is becoming more selective. In this environment, investors that combine disciplined underwriting with strong local market knowledge may be better positioned to identify opportunities that broader market participants overlook.
Sources: SitusAMC 2Q 2026 Field Notes and GlobeSt.