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The 2026 CRE Opportunity Most Are Too SCARED to Take · The Hannah Hammond Show

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2026 is going to be a year that separates the smart investors
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from everyone else in commercial real estate, and I don't say
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that lightly. I've been in this business for
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many years and I've seen various cycles, and I can tell you that
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the decisions that you make this year will compound for the next
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decade. We just came off of a wild ride
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in 25 Tariffs rattled the economy, interest rates stayed
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stubbornly higher than everyone wanted.
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And a lot of people have been sitting on the sidelines,
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paralyzed by uncertainty, waiting for the right time to
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make a move. And you know what?
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Some of them are going to keep waiting.
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They're going to wait themselves right out of one of the biggest
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opportunities of their investing careers.
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But if you're watching this video, I don't think that's you.
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I think that you're the kind of person who wants to understand
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what's really happening, not just in the headlines, but the
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actual data, the nuance, the opportunities that others are
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missing. So today I'm going to break down
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exactly what every major research firm is saying about
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commercial real estate in 2026. We're talking Cushman and
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Wakefield, JP Morgan, Deloitte, CBRE, Colliers, all of them.
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I read all these reports so you don't have to.
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But most importantly, I'm going to tell you what these reports
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are not saying the stuff between the lines, the opportunities and
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risks that you need to understand if you're going to
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win this year. I'm Hannah Hammond, founder and
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CEO of HP Capital Capital advisory firm helping investors
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secure financing for commercial real estate deals across the
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country. I also run the firm, a real
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estate brokerage based in Arizona, and I spend my days in
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the trenches talking to investors, developers, lenders
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and brokers who are actually doing deals.
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So I'm not just giving you theory from an ivory tower.
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I'm giving you what I'm seeing in real time with real money on
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the line. So before we dive into 2026,
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let's be honest about what happened in 25 because context
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matters. The economy did not perform as
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well as most people expected. We saw slower GDP growth than
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anticipated. Unemployment ticked up,
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construction took a hit across most sectors because financing
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was expensive and uncertainty was high.
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And Goldman Sachs estimated that tariffs added about half a
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percentage point to inflation in 2025, which is part of why
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inflation stayed stuck around 2.7% instead of coming down to
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the Feds 2% target rate. So that's the challenging
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backdrop, but here's where it gets interesting.
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Cushman and Wakefield just released their 2026 outlook and
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the language they used really stood out to me.
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They said quote, as we head into 2026, the tone has shifted
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meaningfully. There is still risk on both
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sides of the outlook, but we've moved past the peak levels of
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uncertainty and confidence in the CRE sector is building.
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Capital is flowing again, interest rates are moving lower,
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and leasing fundamentals are generally stabilizing or
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improving. If 2025 was a test of
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resilience, 2026 has a real potential to reward it now.
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That's a major shift in sentiment from one of the most
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respective research firms in the industry.
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They're not saying everything is perfect.
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They're saying the worst is probably behind us, and the
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people who positioned well during the uncertainty are about
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to see the results. JP Morgan echoed this in their
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2026 trends report. They said the market is strong
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from both a capital and fundamental standpoint, and they
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anticipate more transactions in the coming year.
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Colliers is forecasting a 15 to 20% increase in sales volume as
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institutional and cross-border capital reenters the market.
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And here's a data point that really matters.
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Transaction volume in the third quarter of 2025 was up over 40%
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year over year. That's not a prediction, that's
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actual deals getting done. Money is moving again, but, and
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this is the critical thing that most people miss, the recovery
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is not uniform. Some sectors are absolutely on
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fire and others are struggling immensely.
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Some markets are booming and others are working through
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massive oversupply. The difference between making
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money and losing money in 2026 comes down to understanding
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which is which. So let me break down the sectors
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that are positioned to win in 2026, and I'm going to give you
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specific reasons why. First up, data centers.
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I already talked about this in my AI video, but it bears
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repeating because it's that significant.
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Deloitte called data centers, quote a clear bright spot in the
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commercial real estate landscape.
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The demand from artificial intelligence, cloud computing
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and digital infrastructure is completely outpacing supply.
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We have 9 major global markets where 100% of new data center
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construction is pre leased before completion.
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Now most individual investors aren't going to go out there and
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build their own data centers on their own.
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That requires hundreds of millions or really billions of
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dollars and very specialized expertise.
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But there's still ways you can play to this trend.
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You can invest as a limited partner in syndications or funds
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that are developing data centers.
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This is a great opportunity to look at and allow you to be able
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to tap into the massive return potential without having to
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actually go develop data centers on your own.
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Or if you're someone that likes to own your own assets and
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invest on your own, then you can look at many verticals that will
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benefit from data center development.
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Land in data center growth corridors, properties that can
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be converted to support data center operations, businesses
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that service these facilities, housing and retail that serves
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the workers. Think about the second and 3rd
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order effects, not just the obvious place.
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Second multi family. Here's something that doesn't
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get enough attention. America does have a massive
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housing shortage. Over 22 million renter
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households experience housing cost burdens, meaning they're
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spending more than 30% of their income on rent. 12 million
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households are classified as severely cost burdened, spending
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over 50% on housing. That's not a short term problem,
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that's a structural imbalance that will take years to resolve.
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The Federal Housing Finance Agency just increased agency
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multi family loan purchase caps by 20 1/2%.
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That's the government basically saying we need more multi family
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lending. Mortgage rates staying high
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means people can't afford to buy homes so they rent.
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Wakefield projects that multi family demand will be 30% higher
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than its 10 year average in 2025 and 2026, supported by high
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mortgage rates, limited for sale inventory, and ongoing
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affordability pressures. Now I want to add some nuance
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here because not all multi families created equal.
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Some markets, particularly in the Sunbelt, got massively
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overbuilt during the boom years. Austin, Phoenix, Nashville,
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certain submarkets have so much new supply hitting the market
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that rent growth has actually been negative.
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The recovery timeline in these areas has been extended.
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If you're buying multifamily in an oversupplied market, you need
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to be getting a significant discount and underwriting very
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conservatively. Third, industrial e-commerce
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isn't slowing down. It now accounts for nearly 16%
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of all retail sales in America, and that number continues to
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grow. Every package that gets
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delivered requires warehouse space, logistics facilities, and
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last mile distribution centers. But here's what's evolving.
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The type of industrial space that commands the highest rents
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is changing. As companies adopt automation
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and robotics, they need buildings with specific
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characteristics. Higher electrical capacity,
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stronger floors, taller ceilings, better climate
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control. The properties that can
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accommodate these requirements will see increasing demand and
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rent growth. The properties that can't will
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continue to struggle. 4th Retail.
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I know, I know, everybody's been saying retail has been dead for
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10 years, and they've been wrong for 10 years.
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JP Morgan Morgan says retail fundamentals are holding firm
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with strong leasing velocity, rising rents and scarce new
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supply keeping quality space at a premium.
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The keyword here is quality. Class A Retail and strong
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locations with great tenants is performing well.
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Grocery anchored centers with necessity based tenants are
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performing well. Experiential retail that gives
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people a reason to leave their homes is performing well.
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Random strip malls in declining trade areas with weak tenants?
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Not so much. You have to know the difference
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now. 5th is alternative asset classes.
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This is where things get really interesting for investors who
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are willing to think outside the traditional categories.
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Senior housing is benefiting from demographic tailwinds as
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baby boomers age. This isn't just a trend, this is
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math. Every single day about 10,000
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Americans turn 65. They will eventually need
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housing with care components and community components.
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Student housing near major universities has reliable demand
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tied to enrollment. Self storage continues to
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perform as Americans accumulate stuff and life transitions
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create storage needs bill to rent.
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Single family communities are merging as a hybrid between
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multifamily and single family. That appeals to families who
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want space but can't afford or don't want to buy.
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These alternative sectors don't correlate perfectly with
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traditional real estate cycles. That makes them valuable
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diversification tools in a portfolio.
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Now let's talk about where you need to be careful, because I'm
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not just here to pump sunshine. Real estate investing requires
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understanding risks. Office is the most complicated
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sector to discuss right now because the narrative doesn't
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match the nuance. Here's what's actually
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happening. The national office vacancy rate
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hit 20.4% in early 2025. That is a record high.
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So on one level, yes, office is struggling.
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At the same time, Manhattan office leasing just had its best
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year since before COVID. Volume was up 40%.
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Rents in midtown Manhattan are back to pre pandemic levels.
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Tech companies are signing major leases again.
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So how do you reconcile these two realities?
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Flight to quality. The Class A amenity rich, tech
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enabled, well located buildings are filling up right now.
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But companies are using office space differently now.
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They want less total space, but they want that space to be
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absolutely amazing. They wanted to draw employees
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back to the office. They wanted to facilitate
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collaboration and culture. The class B&C buildings, the
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ones that feel deflated, they lack amenities, they're in
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secondary locations. These are struggling badly and I
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don't think many of them will really come back as office
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buildings. Some will be converted to
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residential or other uses, and some will be completely
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demolished. If you're building office, you
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better be buying the best buildings in the best locations,
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or you better be buying at such a deep discount that you can
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afford to reposition or convert the asset entirely.
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Now the second caution zone is over leveraged deals.
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From the 2021 to 2022 era, a lot of deals got done at
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historically low interest rates with adjustable rate financing,
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bridge loans and rate caps that are now all expiring.
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These owners are facing a wall of maturities where they need to
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refinance at much higher rates and the numbers just don't work
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anymore. Cohen and Steers says
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delinquencies will likely accelerate into 2026, especially
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in the office sector. Real Capital Analytics shows a
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huge state of maturing loans that need to be addressed.
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Some owners will be able to work through this with their lenders,
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but many others won't. This creates distressed
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opportunities for investors with capital, but it also means you
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need to be careful not to catch a falling knife.
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The third caution zone is any investment thesis that only
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works if the macroeconomic environment is perfect.
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Interest rates might not come down as fast as you hope.
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Tariffs might increase costs more than you expected.
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A recession could still happen and may very will happen due to
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what's happening with the rise of AI and the major displacement
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of many employees in the coming future before that extreme
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abundance is redistributed to the people.
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So I always tell my clients to stress test their assumptions.
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What happens if vacancy is 10% rather than projected?
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What happens if rent growth is flat or negative instead of a 3%
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increase? What happens if your exit cap
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rate is 50 basis points higher than you under wrote?
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If your deal falls apart under any reasonable scenario, it's
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not a good deal. You need a margin for safety.
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Now I want to address the elephant in the room that not
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enough people in commercial real estate are talking about
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honestly, and that's artificial intelligence.
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Here's the reality. We all know that higher
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unemployment is likely around the corner.
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AI is advancing at a pace that's catching a lot of industries off
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guard. Jobs that we thought were safe,
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knowledge work, white collar positions, even creative roles
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are being disrupted faster than anyone predicted.
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And when people lose jobs, that affects their ability to pay
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rent, to consume, to drive the economy that supports real
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estate values. But here's the flip side.
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AI is also creating massive productivity gains.
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Companies that figure out how to leverage AI are becoming
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dramatically more efficient. They're doing more with less.
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They're scaling faster, they're creating new products and
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services that didn't exist before.
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And historically, productivity gains eventually translate into
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economic growth, new industries, and new jobs.
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Although this one's going to be quite different because AI is
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replacing a lot of the job. So this will be a transition of
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redistributing all of that productivity and growth that is
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going into a small select few and redistributing that to the
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people so we can find some sort of equilibrium and a world of
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abundance again. So what does this mean for
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commercial real estate? It's really hard to say with
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certainty right now, and anyone who tells you that they know
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exactly how this plays out is either lying or delusional.
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Will office demand decline further as AI enables more
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remote work and starts to take over many of the jobs over time?
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Most likely. It's definitely not the asset
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class I'm investing in. Will retail suffer if consumer
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spending drops due to unemployment?
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Could happen. Will industrial benefit as AI
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powered logistics and automation require more specialized
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facilities? Probably.
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Will data centers continue to boom as AI requires
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exponentially more computing power?
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Almost certainly. My approach is to be cautious,
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but not paralyzed. I'm not making big bets that
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require everything to go perfectly.
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I'm focusing on asset classes and tenants that are more
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resilient to technological disruption.
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I'm building in more conservative assumptions on job
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growth or decline and consumers, and I'm staying educated on how
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AI is evolving so I can adjust my strategy as the picture
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becomes clearer. The investors who win in this
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environment are the ones who acknowledge the uncertainty,
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stay flexible, and position themselves to benefit.
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Regardless of which scenario unfolds, don't bet the farm on
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any single outcome. Diversify, stay liquid, and pay
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attention. If you're a commercial real
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estate investor or developer looking for capital for your
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projects, I want to hear from you.
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That's literally what I do every single day.
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There's a link in the description below this video,
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and you can always visit our website, hbcapitalre.com to get
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in touch. We work with investors
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nationwide, and we specialize in structuring the best capital
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stack for the deals that you may be working on.
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Whether you're buying, refinancing, developing, or
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restructuring, we can help you explore all your different
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options. And even if we're not the right
15:11
fit for your specific deal, I'm always happy to point you in the
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right direction. And that's how you build
15:15
relationships in this business. If you found this breakdown
15:18
valuable, and I really hope you did, please do me a favor and
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hit the like button. It sounds cheesy, but it
15:23
actually matters for the algorithm and it helps YouTube
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show this video to more people who are searching for
15:27
information about the commercial real estate market and not just
15:30
looking for fluff and hype. Subscribe to my channel if you
15:32
haven't already. I'm putting out content every
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single week on commercial real estate, wealth building,
15:37
personal development, AI, and the intersection of all of them.
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And leave me a comment. Tell me what market you're in.
15:43
Tell me what you're seeing on the ground around.
15:44
Tell me what topics you want me to cover in future videos.
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I read all the comments. I respond to the comments.
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Some of my best video ideas come from questions that people ask
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in the comments. 2026 is going to be a year of opportunity for
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those who are prepared. The sidelines are getting
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expensive. The people who are positioned
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during uncertainty are about to see the patients pay off.
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Make sure you're one of them. I'll see you in the next video.
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Keep building, keep learning, and remember wealth is built by
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those who see opportunity where others see chaos.
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So let's get it.