Following a challenging year, the outlook for 2026 is more positive. Improving market fundamentals, including positive economic growth across most major markets, easing trade concerns, moderating inflation and lower interest rates will contribute to a more stable operating environment. And yet, the convergence of economic, technological, and social forces leaves organizations across the globe navigating a complex and evolving environment, with the commercial real estate industry on the precipice of substantial – and exciting - transformation . 

This Outlook examines six critical forces reshaping commercial real estate: the imperative for efficiency in a higher-cost environment; intensifying supply shortages across property types; ‘experience’ as the new value driver in real estate; the maturation of AI implementation beyond pilot programs; the convergence of buildings with power systems; and the democratization of commercial real estate investing. Each represents both challenge and opportunity for real estate actors.

Dealing with this demands a strategic rethinking of cost management approaches, with real estate teams focused on three areas in 2026: interrogating budget lines closely; optimizing space utilization; and improving operational efficiencies. 

In 2026, cost reduction will involve meticulous scrutiny of every expense. For investors this means asset optimization – maximizing asset efficiency and performance, with proactive maintenance and capex management. For occupiers, it means scrutinizing every operational expense, from utilities to fit-out and improvement costs, to maintenance contracts. Space optimization and portfolio right-sizing will be a key focus to ensure the entire real estate footprint aligns with both current operations and future business needs. 

The continuous drive toward improved efficiency will increasingly lead organizations to external partnerships through outsourcing and supply chain optimization. Technology adoption for buildings/facilities management and service delivery will represent another critical efficiency pathway. Automation and digital solutions promise to significantly reduce operational costs while maintaining service quality, if implemented successfully.

Each cost management strategy will require careful calibration, as every cost reduction initiative must be evaluated for its potential impact on employee productivity, organizational resilience, user experience and talent retention.

Across the global built environment, ‘experience’ has become the decisive factor shaping how people choose where to live, work, shop and spend their time. However, buildings and places are not keeping pace, with ‘experience obsolescence’ risks to assets emerging. While more than two-thirds of people worldwide now expect high-quality, personalized and wellness-enhancing experiences to be integrated into every type of space they engage with, up 5% from 2024, the undersupply of Grade A quality stock coupled with aging and obsolete stock in key U.S. and European markets, will focus experience factors as a fundamental investment driver in 2026.

Currently, organizations are pursuing an average of five AI use cases simultaneously (across data workflows, portfolio optimization, energy management, market analysis and risk modelling), yet only 5% report achieving most of their program goals. Private investors and investment management firms were slightly behind listed investors and institutional investors in their AI results.

In 2026, AI pilot fatigue will emerge as organizations struggle to scale 2025's AI initiatives beyond experimentation. Those that launched multiple pilots without systematic planning will face mounting pressure to demonstrate meaningful ROI, with many discovering their fragmented approach has limited scalability. Companies lacking foundational capabilities - data infrastructure, change management, talent - will hit implementation walls, forcing decisions between strategic investment or AI program abandonment. 

60% of investors across all types still do not have a unified technology strategy for their real estate functions and asset types. For occupiers, 70% do not have a change management framework for AI. 50% are not sufficiently resourced in terms of digital and AI talent. Industries such as life sciences and professional services are particularly challenged in CRE AI talent availability. 

The widening performance gap between systematic implementers and experimental pilots will become undeniable, with leading organizations pulling further ahead while laggards struggle to justify continued AI investment. As AI transformation shifts from productivity and efficiency to workflow redesign and business model innovation, the value propositions of real estate players will change. Strategic capabilities to open up new markets, operate with agility, and provide a data-driven edge in decision- making will become gradually more important in defining success.

Historically, commercial real estate investing has been the domain of institutional investors, real estate operating companies, family offices and high-net-worth individuals. Capital and financing requirements, operating experience, and market barriers to entry have favored experienced and well-capitalized investors. However, regulatory changes, new technologies, increased personal wealth and increased education are paving the way for the democratization of commercial real estate investing and ownership.

While pension plans have long invested in real estate via their investment managers, regulatory changes are now transforming the broader investment landscape.: Policies such as the UK's Mansion House Accord, or the more recent U.S. Executive Order allowing 401(k) plans to offer private real estate funds as a part of their offering, are paving the way for a potential new wave of capital into the sector in the coming years.

Beyond pension and retirement plans, the collective increase in private wealth over the past 15 years will result in a new class of investors seeking income-generating assets at a greater relative value to the global private equity and equities markets. Since the Global Financial Crisis, the aggregate wealth of billionaires has increased by 265%, reaching an estimated US$15.4 trillion in 2025, resulting in significant additional investment capital. 

Additionally, blockchain has at last become a viable platform for commercial real estate investing. Recent notable transactions include KJRM's Realty Token backed by Shiodome City Center as well as the token publicly offered by Kenedix, SMBC Trust Bank, Nomura Securities and BOOSTRY for the investment into rental homes. 

Regulatory changes stand to broaden the ways for individual retirement and pension fund investors to access private markets and commercial real estate and education on the benefits of real estate ownership is expanding as well. This will allow more private and retail investors to gain exposure to private real estate investment funds, and in some cases even own fractional shares of high-value properties—resulting in the democratization of real estate investing.

We would also like to invite you to explore LaSalle’s ISA Outlook 2026 which examines interest rate divergences, AI’s economic impact and identifies compelling investment opportunities in markets and sectors across the globe.