Commercial real estate continues to show signs of improvement despite slower economic growth, elevated inflation and persistently high interest rates, according to NAR’s October 2026 Commercial Real Estate Market Insights report. The office sector is gradually stabilizing, with stronger demand, declining vacancies and improving rent growth, particularly among Class A properties. Multifamily demand is also outpacing new construction, helping reduce excess inventory and support modest rent gains. Retail remains resilient, with historically low vacancy rates and positive demand across major property types. Meanwhile, industrial markets are working through excess inventory as leasing activity strengthens, though rent growth remains subdued. Hospitality performance has held relatively steady, with room rates and revenue measures exceeding pre-pandemic levels despite lower occupancy. While high borrowing costs continue to challenge investment activity, the report points to improving fundamentals across several commercial property sectors.
