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Rate Uncertainty Is Repricing and Delaying Commercial Property Deals

Rate Uncertainty Is Repricing and Delaying Commercial Property Deals

Price disagreements are freezing deals as buyers and sellers wait for rate clarity.

Nina Dale
October 23, 2026

In partnership with

Good morning. CBRE is sounding the alarm on CRE dealmaking as rising rates threaten to derail the market’s rebound. Despite a strong Q3, the brokerage giant warns that transaction delays could stretch well into 2027.

🎙️ This Week on No Cap: Two multifamily operators on turnover costs, affordability, and whether this is a bubble.

CRE Trivia 🧠

The 2026 World Series marks just the second time both participating teams share what feature?

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Market Snapshot

S&P 500

GSPC

7,663.43

Pct Chg:
-1.21%

FTSE NAREIT

FNER

813.56

Pct Chg:
+1.29%

10Y Treasury

TNX

4.959%

Pct Chg:
-0.187%

CME Term SOFR

1-Month

3.94%

Pct Chg:
-0.00

*Data as of 10/22/2026 market close.

Capital Markets

Rising Rates Threaten CBRE’s Deal Momentum as CRE Uncertainty Grows

Just as CRE transactions were gaining momentum, rising interest rates are threatening the recovery, with CBRE warning that dealmaking challenges could extend into 2027.

Deal delays mount: Higher borrowing costs and rising cap rates are forcing deals to be repriced, canceled, or converted into refinancing transactions. CBRE CEO Bob Sulentic says rate volatility and uncertainty are keeping investors sidelined, potentially until the second half of 2027.

By the numbers: Despite growing headwinds, CBRE posted a strong third quarter:

Revenue: Rose 13% to $11.5 billion.
Net income: Jumped 22% to $443 million.
Property sales: Increased 28% globally and 37% in the U.S.
Industrial leasing: Climbed 16%, setting a Q3 record.
Data center revenue: Surged 80%.

A tale of two markets: While traditional CRE deals face pressure, data center infrastructure is booming. Following its $1.2 billion Pearce Services acquisition and latest purchase of Onnec Group, CBRE expects critical infrastructure revenue to reach nearly $4.5 billion by 2027.

Corporate spending shifts: Major tech companies are redirecting investment from traditional real estate toward data centers and infrastructure. Combined with economic uncertainty, this shift is slowing corporate property spending while fueling demand for digital infrastructure.

The 2027 outlook: CBRE maintained its 2026 earnings guidance of $7.80–$7.90 per share and projects 15% earnings growth in 2027. Infrastructure expansion should help offset weaker capital markets activity.

➥ THE TAKEAWAY

Recovery on hold: CRE's transaction rebound faces another hurdle as rate uncertainty delays deals into 2027. Until borrowing costs stabilize, investment activity could remain sluggish. Meanwhile, CBRE's infrastructure expansion highlights a broader capital shift toward data centers and the growing AI economy.

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✍️ Editor's Picks

In renters’ own words: What happens when renters aren’t limited by filters or keywords? A new white paper reveals the top takeaways when renters make their voices heard. (sponsored)
Selective credit: Capital is still flowing to CRE, but elevated base rates are the drag, with Colliers pegging all-property cap rates at 6.1% as investors chase cash-flow growth over compression.
Liquidity penalty: Buyers demand a far bigger yield premium to own office than industrial, MSCI says, as distress tops 35% of downtown space sold since 2024.
Claude now sources CRE deals: Terrakotta's Claude Agent is disrupting the CRE industry as we speak. Brokers can now automate LLC skip-tracing, find motivated sellers, and source off-market deals. (sponsored)
Payoff wave: Bank OZK's construction book is shrinking fast, taking $9.2B in payoffs against $5.2B of new loans last year as debt funds crowd into the space.
Release stakes: Bill Ackman says freeing Fannie Mae and Freddie Mac is politically critical, pushing a phased exit from conservatorship over a rushed IPO.

🏘️ Multifamily

Rent resilience: Independent landlords collected on-time rent from 83.2% of tenants in October, up 56 bps from September, a sign smaller operators' cash flow is holding up.
Buyers return: LA apartment sales jumped 44% to $3.3B YTD even as rents stalled near $2,428, as investors bet on repricing rather than rent growth.
Builders retreat: Single-family permits fell to an annualized 845,000 in September, a 3.5-year low and down 4.8% YoY, as high rates keep buyers and builders sidelined.
Border shift: Developers are crossing from Massachusetts into New Hampshire, where Procopio lined up a loan for a 310-unit build-to-rent project it says Massachusetts' rules made impossible.
Fund doubles: Northwind closed its third credit fund at $1B after doubling a $500M target, already originating $1.5B across multifamily, condo and office-to-resi deals.

🏭 Industrial

Storage softens: Self-storage advertised rates fell 1.8% YoY in September even as construction slows, as earlier oversupply keeps a lid on pricing power.
Suburban tilt: Suburbs captured 59% of self-storage space built across the top 100 metros over the past decade, tracking the same population drift reshaping housing demand.
Warehouse bet: MDH Partners closed about $163.7M in financing for recent industrial acquisitions, extending an active year of warehouse buying.
Factory play: Hines is concentrating its industrial bets on metros poised for the roughly $1T US manufacturing buildout, naming Dallas-Fort Worth, Houston and Phoenix.

🏬 Retail

Pipeline thins: Retail construction starts sank to about 7.7M SF in Q3, the weakest since 2016, leaving a thin 58.3M-SF pipeline that shields existing centers from new competition.
Grocery wager: PSP Investments and Nuveen launched a $790M joint venture to buy open-air, grocery-anchored centers, the latest institutional bet on necessity retail's steady cash flow.
Wash demand: Net-lease car wash listings are climbing even as cap rates hold firm near the low-6% range, a sign investor appetite is keeping pace with supply.

🏢 Office

Flex grows: US coworking inventory grew 2M SF to 168.4M SF in Q3 even as office vacancy held at 17.8%, as flexible space keeps gaining share of a flat market.
Net-lease dip: Single-tenant office sales fell to $1.9B in Q2 even as cap rates dipped, a sign buyers still pay up for creditworthy, long-lease deals.
Trophy surge: Top-tier trophy office rents jumped more than 20% YoY in Q3, roughly double the pace of second-tier premium space as supply keeps shrinking.
Boca buy: Related Ross paid $64M for a South Florida office portfolio, extending Stephen Ross's Palm Beach-area cluster even as the broader office market stays soft.

🏨 Hospitality

Earnings jitters: Hotel investors are bracing for Q3 results after US RevPAR slipped 1.4% YoY, with analysts warning each point of RevPAR swings hotel EPS by more than one.
Terminal build: United Airlines is advancing a $2.6B Terminal B overhaul at Houston's Bush Intercontinental, adding 40 gates to lift peak capacity about 40%.
Soft brands: Olympia Hospitality is leaning into independent and soft-branded hotels alongside franchises, betting character and flexibility win guests without losing brand reach.

📈 CHART OF THE DAY

CRE values remain 13% to 56% below replacement costs as higher construction and financing costs limit new development, reduce future supply, and strengthen the outlook for existing property owners.

CRE Trivia (Answer)🧠

Covered ballparks. The first such matchup occurred in 2023 between the Texas Rangers and Arizona Diamondbacks.

Rate Uncertainty Is Repricing and Delaying Commercial Property Deals

Price disagreements are freezing deals as buyers and sellers wait for rate clarity.

CRE Trivia 🧠