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CRE Turns ‘Cheap’ Relative to Stocks for First Time in 20 Years

CRE Turns ‘Cheap’ Relative to Stocks for First Time in 20 Years

A rare pricing gap between real estate and stocks could mark an inflection point for investors.

Nina Dale
February 27, 2026

Together with

Good morning. CRE is trading at a rare discount to equities as fundamentals begin to stabilize. With liquidity returning and price discovery improving, investors may be eyeing an early-cycle opportunity in 2026.

Today’s issue is sponsored by ICSC+PROPTECH—Discover the innovations transforming CRE at ICSC Las Vegas, May 18–20.

CRE Trivia 🧠

Which hotel brand pioneered the extended-stay concept?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,908.86

Pct Chg:
-0.54%

FTSE NAREIT

FNER

827.41

Pct Chg:
+0.63%

10Y Treasury

TNX

4.01%

Pct Chg:
-0.038

SOFR

30-DAY AVERAGE

3.67%

Pct Chg:
-0.00

*Data as of 2/26/2026 market close.

Valuation Gap

CRE Turns ‘Cheap’ Relative to Stocks for First Time in 20 Years

CRE is now trading at a rare discount to U.S. equities, creating what some see as a reset moment for the asset class.

By the numbers: MetLife Investment Management reports that CRE valuations—based on cap rates relative to stock P/E ratios—have fallen below equities for the first time in roughly 20 years. Investment activity is rebounding from 2023 lows, with the NFI-ODCE redemption queue narrowing from 19% of NAV to 12%, easing liquidity pressure.

Price discovery improves: The gap between appraised values and transaction prices has narrowed since late 2023, signaling closer alignment between buyers and sellers. Property price growth turned positive in 4Q24 and continued into 2025, with private values projected to rise about 5% in 2026.

Opportunities widen: MIM highlights seniors housing, infill industrial, medical office and net-lease retail as offering attractive risk-adjusted returns, backed by stabilizing fundamentals and repriced values. Megatrend-driven sectors such as data centers, manufactured housing and senior living are also starting to outperform in benchmarks like the NCREIF Property Index.

Early signs of life: National office vacancy ticked down to 18.8%, 20 basis points below its peak, with positive absorption in late 2025. Sun Belt markets like Miami have rebounded, but performance remains split between Class A+ assets and lower-tier properties.

➥ THE TAKEAWAY

Cycle turning? CRE’s valuation reset and improving liquidity suggest the market may be shifting. Selective investors could find opportunity in 2026 before capital fully returns.

TOGETHER WITH ICSC+PROPTECH

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Stay ahead of the curve, embrace digital innovation and leverage technology to unlock new efficiencies, enhance tenant experiences, and maximize asset value.

ICSC+PROPTECH takes place at ICSC LAS VEGAS, the world’s largest CRE event, May 18th - 20th.

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

✍️ Editor’s Picks

Portfolio IQ: Turn disconnected self-storage reports into clear, portfolio-wide insights that help you track trends, compare properties, and optimize results. (sponsored)
Sounding the alarm: Jamie Dimon warned banks are “doing dumb things” as market conditions resemble the pre-2008 cycle, flagging renewed risk-taking.
Shadow leasing: Tech giants are obscuring 662B of data center leasing commitments, potentially masking far larger capacity obligations.
Pitch perfect: Turn your underwriting into polished, on-brand decks in minutes with Henry, so you can send faster and close sooner. (sponsored)
Citi pledge: Citi committed $60B to affordable housing, doubling its investment pace in the sector.
Betting the bay: Investors are piling back into San Francisco real estate, betting the city’s AI boom and discounted office towers signal a downtown revival.

🏘️ MULTIFAMILY

Rent tracker: Rents rose 0.2% in February but remain down 1.5% year-over-year as record 7.4% vacancy and heavy supply keep pressure on pricing.
Brookfield exit: Brookfield cashed out $215M from a San Francisco apartment portfolio, monetizing multifamily holdings in the city.
Bay surge: Bay Area multifamily investment volume surpassed $8B for the first time since 2019, signaling renewed transaction activity.
Wynwood financing: A Wynwood affordable housing project secured $44M in public construction financing, advancing the development pipeline.
Resort migration: Affluent California buyers are targeting a Colorado resort market for second homes, driving demand in the area’s luxury segment.

🏭 Industrial

Mac shift: Apple will manufacture Mac Minis in the U.S. through a Houston campus expansion, adding domestic production capacity.
Storage playbook: Self-storage operators are using winter promotions and operational resets to boost occupancy ahead of the spring leasing season.
Industrial snapshot: Yardi Matrix’s February 2026 national industrial report details rent growth, supply deliveries and vacancy trends across U.S. markets.
Denver pause: Denver officials proposed a moratorium on new data centers, potentially slowing development amid power and infrastructure concerns.

🏬 RETAIL

Closure wave: Major retailers are slated to close stores in 2026, extending a multi-year contraction in brick-and-mortar footprints.
Tesla trade: Two Tesla-leased retail properties sold for $50M, signaling continued investor demand for credit-backed net-leased assets.
Theater retrenchment: AMC expects to close more theaters than it opens, further downsizing its footprint as box office pressures persist.
Fulton clash: High-fashion and fast-food retailers are competing for space in Chicago’s Fulton Market, reshaping the district’s retail identity.

🏢 OFFICE

Amex Anchor: American Express signed a lease at the World Trade Center, unlocking the final phase of the site's long-running redevelopment.
NoMad refi: Global Holdings secured a $450M CMBS refinancing for its 39-story NoMad office tower, extending debt on the Manhattan asset.
Federal selloff: The federal government plans to sell a 2.2M SF Southwest DC office building, advancing efforts to shed excess space.

🏨 HOSPITALITY

Upper expansion: An Australian restaurant chain signed a new Upper West Side lease, extending its New York City footprint.
Savannah trade: Hersha acquired the Westin Savannah hotel in a recent transaction, adding the property to its holdings.

📈 CHART OF THE DAY

Rapid AI adoption has driven a sharp rise in productivity, accelerating GDP growth while easing inflationary pressures and supporting stronger overall economic performance.

CRE Trivia (Answer)🧠

Residence Inn by Marriott is widely credited with pioneering the modern extended-stay hotel concept when it launched in the 1970s.

CRE Turns ‘Cheap’ Relative to Stocks for First Time in 20 Years

A rare pricing gap between real estate and stocks could mark an inflection point for investors.