Commercial Real Estate Sentiment Steady in Q1 2026 as Debt Availability Improves
February 20, 2026 | Author: David J. Murphy
The Real Estate Roundtable released its Q1 2026 Sentiment Index on February 20 (full report at rer.org). The overall index registered 66, down one point from the prior quarter. Senior CRE executives describe a market in the early stages of a tentative, uneven recovery, with improving debt conditions tempered by persistent uncertainty around tariffs, interest rates, and geopolitics.
Headline Figures
The Current Conditions Index rose two points to 66, while the Future Expectations Index dipped two points to 67. Nearly two-thirds of respondents (63%) say conditions are better than a year ago, and 64% expect further improvement over the next twelve months. Fewer than one in ten see things getting worse. On pricing, 48% believe asset values have already risen, 43% see them as roughly unchanged, and only 9% believe they have declined. Looking ahead, 67% expect asset prices to rise over the next year, 30% believe they will remain stable, and 3% anticipate a slight decline.
Debt Capital Availability
The most notable shift in the Q1 data is in debt market sentiment. Seventy-eight percent of respondents say debt capital availability has improved over the past year. Looking forward, 49% expect debt availability to improve further. This aligns with findings in the Deloitte 2026 Commercial Real Estate Outlook (deloitte.com), which notes that only 9% of banks were tightening lending standards as of mid-2025, down from 67.4% in April 2023. Deloitte observes that reduced tightening of lending standards has historically been a reliable precursor to capital value improvements in commercial real estate.
Equity Capital Availability
Equity sentiment is more muted. About 42% of respondents see equity availability as better than a year ago, while 65% expect it to improve over the coming year. Respondents reported strength in data centers and industrial, while returns in multifamily and office remain heavily location-dependent.
Policy Uncertainty and Transaction Activity
Tariff policy, interest-rate expectations, and broader geopolitical risk continue to widen spreads between buyers and sellers. Price discovery remains slow in many segments of the market. As RER President and CEO Jeffrey DeBoer noted, “This quarter’s survey shows the market is stabilizing, with improving debt availability and growing optimism about the year ahead, even as uncertainty continues to keep transaction volume below potential.”
DeBoer added that the industry “is positioned for a more constructive 2026, but sustained momentum will depend on a stable policy environment. That stability supports investment decisions that drive jobs, housing, and economic activity in communities nationwide.”
Sector Performance
Perspectives vary by asset class. Leaders reported strength in data centers and industrial. Multifamily and office returns remain heavily location-dependent. Less than 10% of respondents believe general market conditions are worse than a year ago. CBRE’s 2026 U.S. Real Estate Market Outlook (cbre.com) similarly notes that leasing activity will continue to recover in 2026 from its 2024 low, with timing and performance varying across sectors, asset types, and markets.
Looking Ahead
The Q1 Sentiment Index reflects a market that is stabilizing, with improving debt availability and firming asset values. Most industry leaders expect conditions to improve over the next twelve months. Transaction momentum will likely depend on greater clarity around trade policy, interest rates, and the broader geopolitical environment.
David J. Murphy is the managing attorney at Murphy PC in Boston, Massachusetts. He regularly represents real estate developers and investors in real estate development projects.