CRE Investment Navigates Inflation & Recovering Confidence

By RadCRE Research · 2026-09-26 · Industry Insights

Despite persistent inflation and higher rates, commercial real estate investment is showing a "curious rise" in the U.S. [2].

Global Investment Landscape Reshaping in H2 2026

The global commercial real estate (CRE) market is exhibiting nuanced trends in the latter half of 2026, characterized by a complex interplay of macroeconomic conditions, investor sentiment, and specific sector performance. While certain regions are witnessing a recovery in confidence, others are presenting unique, localized investment opportunities.

US Market Sees "Curious Rise" Amid Economic Headwinds

In the United States, commercial real estate investment is experiencing a "curious rise" despite prevailing higher inflation and interest rates [2]. This trend suggests a potential recalibration of investor strategies or a strong underlying demand for specific asset types that are proving resilient in the current economic climate.

UK Capital Markets Forecast Continued Momentum

Across the Atlantic, the UK Capital Markets are anticipated to maintain momentum into H2 2026 and beyond. This positive outlook is primarily fueled by a gradual recovery in investor confidence and supportive policy initiatives, according to JLL's latest review [1]. The analysis, which draws on historical data and real-time investor insights, highlights resilience and opportunities across various sectors in the UK market [1].

Sector-Specific Dynamics: Hotel and Seniors Housing Thrive

The hotel sector continues to attract significant capital, with global hotel investment properties volume reaching $8.1 billion in 2025 [4]. Hospitality professionals are leveraging market intelligence and global connections to navigate the distinct challenges of investing and divesting in hotel properties [4].

Meanwhile, the Seniors Housing and Care sector in the U.S. is demonstrating robust recovery and investor optimism. Rolling four-quarter transaction volume for seniors housing reached over $24 billion by year-end 2025, marking its highest level since Q2 2015 ($26 billion) [6]. Market sentiment has shifted towards cap rate compression, with 85% of surveyed respondents expecting further cap rate decreases over the next 12 months, a substantial increase from 57% just a year prior [6]. Occupancy levels have largely recovered to pre-pandemic benchmarks, with primary markets averaging 89.9% and secondary markets at 90% in Q4 2025 [6]. This performance is further buoyed by supply constraints, as new construction starts have declined significantly—77% in primary markets and 62% in secondary markets from recent peaks [6].

Localized Opportunities: Retail in Kennedy Town, Hong Kong

Specific opportunities are emerging in diverse markets, such as Hong Kong, where a rare retail podium in Kennedy Town is being offered for sale. This asset, approximately 90% occupied and anchored by the district's only cinema tenant, provides immediate rental income and potential for strata-sales [3]. Offered at an attractive price of approximately HKD7,200 per sq ft, it represents a unique large-scale retail acquisition in an established residential area [3].

RadCRE Perspective

"The current CRE investment landscape presents a fascinating dichotomy. On one hand, we're seeing a 'curious rise' in U.S. investment despite economic headwinds, which speaks to the underlying belief in real estate's long-term value and the hunt for yield in a challenging environment. The strong performance and positive outlook in sectors like seniors housing, with significant transaction volumes and anticipated cap rate compression, highlight where smart capital is flowing. Meanwhile, the UK's forecast of continued momentum, driven by recovering confidence, and highly specific, attractive opportunities like the Kennedy Town retail podium, remind us that localized market intelligence is crucial. Investors must remain agile, discerning, and globally aware to capitalize on these diverse trends." — Majid Radaei, Founder & Principal Broker, RadCRE

Tags: CRE investment outlook, capital flows, commercial real estate, hotel investment, seniors housing