In 2026, the real estate market is entering a period best described as a reset rather than a rebound. Economic uncertainty continues to pressure profits but shifting conditions — particularly interest rate cuts and easing property insurance costs — are creating opportunities for owners and investors who are prepared to respond strategically.
Rather than dramatic swings, 2026 will reward discipline. Owners who understand where risks are easing, where they are intensifying and how those forces intersect will be best positioned to protect value and capitalize on emerging opportunities.
Several trends are shaping how deals are being evaluated, financed and managed. Liquidity is returning, but profitability still must be earned. After years of elevated interest rates, the prospect of additional rate cuts is unlocking refinancing opportunities and improving market liquidity. According to NAIOP, nearly $1.8 trillion in commercial real estate mortgages is set to mature in 2026, following roughly $960 billion in 2025, per the Mortgage Bankers Association. This forces owners to make decisions around refinancing, recapitalization and asset repositioning.
While lower borrowing costs may help stabilize profitability, relief will be uneven across asset classes. Office properties continue to face elevated vacancy outside of Class A space, industrial assets are grappling with tariff uncertainty and construction costs, while multifamily has shown relative stability but limited margin expansion. Compounding the challenge, 91% of industry leaders cite rising operating and labor costs as the biggest threat to profits in 2026, according to Hub’s Profitability and Resilience Survey.
Owners must proactively approach liquidity events. Refinancing scenarios should be stress-tested well ahead of maturity, portfolio diversification revisited with fresh eyes and capital allocated towards improvements with clear operational returns. Profitability in 2026 will favor disciplined underwriting, conservative expense assumptions and a willingness to make hard decisions about underperforming assets.
Workforce stability is becoming a property risk indicator. Property and facility management roles are under particular strain, with as many as 160,000 real estate industry positions expected to go unfilled by 2030 as reported by Propmodo. Tenants in hospitality, retail and logistics continue to struggle with staffing, affecting operating hours, service levels and long-term viability. Hybrid work has further complicated demand, requiring landlords to rethink space utilization and amenities in ways that are increasingly labor-dependent.
Owners navigating these pressures will need to treat workforce strategy as an operational risk issue, not a secondary concern. Recruiting, retention and training should be viewed as integral to asset performance and tenant stability. Compensation, career development and benefits will need to be aligned with the realities of today’s labor market. In a tight hiring environment, workforce resilience will increasingly underpin property resilience.
Insurance costs are easing — selectively. After years of sharp increases, property insurance markets are showing meaningful signs of relief. Rate reductions begun in 2025 are expected to continue this year, with commercial property rates declining by as much as 15% in some markets and residential rates falling up to 25% where new underwriters are entering the market. Wellmanaged risks with strong loss prevention are positioned to benefit most.
Owners will need to treat insurance as a yearround portfolio consideration rather than a once-a-year renewal exercise. Replacement valuations should be kept current, risk controls clearly documented, and safety and security measures actively maintained. In 2026, insurance outcomes will increasingly reflect how well risks are understood and communicated, not simply broader market softening.
Litigation and cyber are expanding risk. Legal and cyber exposures are playing a larger role in real estate risk profiles. Nuisance lawsuits, particularly those tied to ADA compliance, continue to create unpredictable costs and repeat exposure. Cyber risk is accelerating with wire fraud and business email compromise, with individual phishing incidents resulting in losses approaching $20 million, reported The Broadsheet.
As smart building technologies and digital transactions become more prevalent, integrated legal and cyber strategies will be essential to protecting both deal execution and ongoing operations. Legal compliance, transaction verification protocols, staff training and cyber defenses should be coordinated rather than managed in silos.
Risk Maturity: A Competitive Advantage. Risk maturity is now a decisive differentiator in underwriting, financing and property insurance deal execution. Capital providers and insurers are no longer evaluating asset quality in isolation. They are looking closely at how owners identify, measure and manage risk across their portfolios. Properties supported by outdated data, fragmented strategies or reactive approaches are more likely to face tighter terms, even as some markets soften.
Owners will need to take an enterprise-wide view of risk that integrates operations, insurance, legal exposure and cyber considerations.
Accurate data, disciplined communication and early engagement with advisors will support better outcomes across transactions, financing and insurance placement. 2026 will not reward shortcuts or assumptions. It will favor those who understand their risks, manage them intentionally and prepare their portfolios for continued uncertainty.
Frank DeLucia
Executive Vice President
Hub International Northeast
frank.delucia@hubinternational.com
(212)338-2395
