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$250B in Dry Powder Eyes CRE Market Rebound

$250B in Dry Powder Eyes CRE Market Rebound

With rates stabilizing and loan maturities looming, investors are preparing to act.

Nina Dale
January 09, 2026

Together with

Good morning. CRE investors are gearing up for action in 2026. With fundraising up and rates settling, the market may be ripe for long-awaited capital deployment.

Today’s issue is sponsored by Hines. Get ahead of the cycle with insights from their 2026 Global Investment Outlook.

CRE Trivia 🧠

Among U.S. states, which southern destination has emerged as a magnet for Gen Z movers, thanks to affordability and job growth?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,921.39

Pct Chg:
+0.007%

FTSE NAREIT

FNER

758.68

Pct Chg:
+0.97%

10Y Treasury

TNX

4.183%

Pct Chg:
+0.045

SOFR

30-DAY AVERAGE

3.73%

Pct Chg:
-0.00

*Data as of 1/8/2026 market close.

Investor Capital

$250B in Dry Powder Eyes CRE Market Rebound

After years of waiting on the sidelines, private real estate capital may finally be ready to reenter the game in a meaningful way.

Regaining confidence: After a slowdown, private real estate funds saw a rebound in 2025, raising $164.4B globally—$115B targeting North America. Optimism is up, but many funds remain cautious, awaiting more distressed opportunities beyond the office sector.

Core capital comeback: Opportunistic and value-add strategies made up 65% of 2025 fundraising, but signs show a growing shift back to core and core-plus. Heitman and CBRE report rising interest from long-term investors like pension funds, signaling a move toward stability and cash flow in 2026.

Asset sales on the rise: Industrial and retail led the rebound in 2025, with sales up 16% and 21%. Office deals jumped 24% by Q3, despite high vacancies. Stronger fundamentals and a steady 10-year Treasury near 4% are boosting investor confidence for 2026.

What investors want: Flex industrial is in demand, with 60% of clients seeking small-bay, multitenant deals for easier leasing and lower capex. Grocery-anchored retail stays strong, while value investors hunt distressed retail. In industrial, NNN or short-WALT multitenant assets are preferred over mid-sized properties.

Alternatives gaining momentum: Institutional investors like Heitman are increasingly targeting alternatives such as medical office, self-storage, and data centers. These sectors align with demographic and operational trends, offering appeal as traditional assets face oversupply and soft fundamentals.

➥ THE TAKEAWAY

Year of deployment: With $250B in North American dry powder, 2026 could be a pivotal year for CRE. Expect early opportunistic plays, a core strategy rebound, and rising interest in niche alternatives as investors chase yield and stability.

TOGETHER WITH HINES

Hines Research sees global real estate markets ready for takeoff.

What does 2026 have in store for real estate investors? In our 2026 Global Investment Outlook, Hines Research takes on the challenging questions of how the ongoing recovery is playing out – and where.

Read the report for the latest views on sectors and the current market environment signaling a shift in investors’ focus on rental growth.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

All-in-one momentum: Covercy partners with NAV Fund Services, adding fund administration to its extensive banking and investment management ecosystem. (sponsored)
Broder buildout: The White House is lining up developers for up to $10B in immigration facility projects, signaling a major expansion of detention infrastructure.
Bid signals: Rising bid intensity—especially in sub-$25M deals—is offering an early look at growing confidence in U.S. CRE, even as closed transaction volumes lag behind.
Credit shift: Private credit is outpacing real estate equity, pushing investors to favor debt and infrastructure as CRE fights to stay competitive in a capital-constrained market.
Bubble watch: In 2026, the data center sector faces a make-or-break year as AI demand surges, power and politics reshape development, and overbuild fears grow.

🏘️ MULTIFAMILY

Patchy recovery: U.S. housing supply improved in 2025, but demand stayed weak and regional divides widened, with the South and West seeing the biggest inventory gains.
Family ties: NYC is challenging the $451M bid for Pinnacle’s rent-stabilized portfolio over concerns about the buyer’s link to the CEO’s brother and doubts about financial capacity.
Mid-tier momentum: As luxury multifamily faces oversupply and slowing rents, mid-tier apartments are quietly outperforming in balanced markets like the Midwest and Northeast.
Cooling pipeline: Apartment deliveries in the Southeast have dropped sharply from 2024 peaks and are projected to fall below pre-pandemic levels by 2027.
Buying blitz: JRK invested $1.3B in multifamily assets in 2025, targeting value and stability as supply eases and market fundamentals improve.

🏭 Industrial

Sector slowdown: The industrial sector spent 2025 absorbing excess space and adapting to shifting policies, per Yardi Matrix.
Can control: AB InBev is buying back its $3B stake in U.S. metal container plants to cut tariff costs and secure supply as it ramps up domestic production and expands beyond beer.
Bay play: Silverman Group paid $203M for a 1.4M SF micro-bay industrial portfolio in MD and VA, targeting strong demand for small-bay logistics.
Distribution strategy: EQT Real Estate acquired a 1.6M SF, 13-asset industrial portfolio across seven markets, targeting last-mile, infill logistics.

🏬 RETAIL

Private surge: Single-tenant net lease retail deals jumped 18% in 2025, fueled by private investors chasing stable, low-maintenance returns.
Fitness flip: W.P. Carey acquired a $300M portfolio of 10 Life Time fitness clubs from TPG Angelo Gordon, expanding its net lease holdings as it pivots away from office assets.
High street traffic: High-street retail in CBDs is staging a comeback as rising office occupancy, tourism, and mixed-use development breathe new life into downtowns.
No-frills: Aldi is pouring $9B into U.S. expansion, betting its no-frills, low-price model will thrive as inflation-weary shoppers prioritize value over polish.

🏢 OFFICE

Default replay: Columbia Property Trust has defaulted again on a $1.7B loan tied to a seven-property office portfolio as property values slide and foreclosure risks loom.
Gables grab: Lone Star Funds and partners acquired Coral Gables’ Alhambra office complex for $119.6M, signaling confidence in South Florida's steady office demand.
Flex appeal: Two new LA developments—Arc Beverly and The Lighthouse—blend coworking with club-style amenities to lure hybrid workers and creators.
Silicon scoop: DivcoWest snagged San Jose’s Campus at Trimble for $63.6M, over 30% below its 2015 price.

🏨 HOSPITALITY

Brooklyn bet: Ace Hotel Brooklyn secured a $112.5M refinancing, signaling continued investor confidence in NYC’s tightly supplied, regulation-constrained hospitality market.
Stadium strategy: P3 Properties landed $25.2M from OptimumBank to acquire and rebrand a hotel near MetLife Stadium, banking on World Cup momentum to boost its East Rutherford investment.

📈 CHART OF THE DAY

Since 1990, REITs have delivered trailing 10-year annualized total returns above 6% in 94% of monthly periods, with only three notable exceptions (2008, 2016, and 2023), each followed by strong forward performance.

CRE Trivia (Answer)🧠

According to StorageCafe, South Carolina has become a top destination for Gen Z, who now make up 30% of new arrivals to the state.

$250B in Dry Powder Eyes CRE Market Rebound

With rates stabilizing and loan maturities looming, investors are preparing to act.