Reading the Signals – March 16, 2026
Structural forces are reshaping “where and how demand for real assets is forming,” Affinius Capital says in a new report
The U.S. commercial real estate market “once again finds itself at an important juncture that has been shaped by a gradual easing in financial conditions, improving visibility on valuations, and an economy that has proven resilient despite persistent policy noise,” writes Mark Fitzgerald, head of research at Affinius Capital, in the firm’s just-released 2026 North American House View – From Static to Signal: The Path to Lift-Off. “After an extended period of repricing and one of the longest periods of constrained liquidity in memory, there are again signs that capital markets are beginning to function more normally, even if unevenly.”
However, a return to normal functioning doesn’t mean dusting off a pre-pandemic investment playbook. The game has changed. Fitzgerald cites structural forces, ranging from the digitization of the economy and the expansion of AI-driven infrastructure to demographic pressures on housing and the reconfiguration of global supply chains, as forces reshaping “where and how demand for real assets is forming. These forces are not cyclical in nature, but secular, and they provide a durable foundation for selective investment as the next phase of the cycle takes shape.”
High-level insights in From Static to Signal include the following:
- The next stage of the cycle is increasingly defined by “relative value, sector dispersion and execution-driven outcomes,” Fitzgerald writes.
- Even as U.S. economic momentum is decelerating across much of the economy, the key exception remains AI-driven capital investment, which continues to support pockets of resilience through productivity gains and outsized spending.
- A check on this investment when it comes to the infrastructure needed to support generative AI adoption is power availability. “This imbalance is reshaping market geography, redirecting investment toward U.S. and European markets with favorable energy profiles,” writes Fitzgerald. “The resulting scarcity supports long-term pricing power for developers able to secure and deliver energized capacity.”
- As banks and insurers recalibrate under evolving regulatory and capital frameworks, non-bank lenders play an increasingly central role in CRE finance. “Real estate credit continues to offer an attractive opportunity, supported by conservative underwriting and tangible collateral,” Fitzgerald writes.
- With construction pipelines across the multifamily and industrial sectors contracting sharply after several years of elevated deliveries, the stage is set for improving fundamentals as capital availability gradually loosens.
- As the cycle shifts toward execution and tenant selectivity, “placemaking is becoming a more important driver of relative performance,” Fitzgerald writes. “This trend is supported by consistent rent premiums in mixed-use environments, particularly within high-quality urban nodes.”
It’s been said that CRE can function in a good market or a bad market, but not an uncertain one. We’re in such a period of uncertainty now, and we have been for some time. “What makes the current environment particularly challenging to interpret is that the key economic indicators have, in many respects, remained unexpectedly normal despite extraordinary policy rhetoric,” writes Fitzgerald.
“Employment and wage growth have moderated but remain resilient; consumer spending persists even as sentiment surveys paint a more pessimistic picture. This divergence between hard data and soft indicators has led some to label the current situation as a ‘vibecession.’ Noise in the data has been amplified by structural problems in the data collection itself: post-pandemic response rates to economic surveys have declined significantly, and the recent government shutdown created additional gaps in timely information flow.”
This puts the onus on investors to understand “not just what is happening, but what is already priced in and what remains underappreciated, particularly as key sectors diverge sharply in their trajectories.” To liken the current situation to driving, cruise control is best suited for flat, straight highways where speeds can be maintained evenly. This isn’t that kind of highway.