CRE Investment Trends: Retail & Hotels Attract Capital Amid Shifts

By RadCRE Research · 2026-09-25 · Industry Insights

Despite economic headwinds, U.S. commercial real estate investment is showing a "curious rise" [1]. Global hotels activity reached $8.1B in 2025 [3].

Current CRE Investment Landscape

The commercial real estate investment landscape is currently characterized by a "curious rise" in U.S. investment, even amidst higher inflation and interest rates [1]. This trend suggests a nuanced investor sentiment that is selectively deploying capital into specific asset classes and strategies. While the broader economic environment presents challenges, certain sectors continue to demonstrate resilience and attract significant investment volume.

Sector-Specific Capital Flows

Investment activity remains robust in several key sectors. The hotel sector, for instance, saw substantial global activity, with Investment Properties Volume reaching $8.1 billion in 2025 [3]. This indicates continued investor confidence in hospitality assets, likely driven by factors such as improving travel and tourism. Firms like CBRE are actively assisting clients in navigating the unique challenges of investing in and divesting from hotel properties, leveraging market intelligence and global connections [3].

The retail sector is also experiencing significant evolution, with 44 forces reshaping its future [2]. Investment opportunities are emerging, as exemplified by a rare retail podium in Kennedy Town, Hong Kong, being offered for sale. This property, approximately 90% occupied and anchored by the district's only cinema, presents an attractive offering at approximately HKD7,200 per sq ft, providing immediate rental income and strata-sales potential [4]. This points to continued interest in retail assets with strong fundamentals and strategic locations.

Another notable area of investment is Seniors Housing and Care. The sector has seen a recovery in transaction volume, with rolling four-quarter transactions reaching just over $24 billion by year-end 2025, marking its highest level since Q2 2015 ($26 billion) [6]. Market sentiment in this sector has shifted towards cap rate compression, with 85% of survey respondents expecting cap rates to decrease further over the next 12 months, reflecting improving market conditions and investor confidence. Occupancy levels have largely recovered to pre-pandemic levels in most markets, averaging 89.9% in primary markets and 90% in secondary markets in Q4 2025 [6].

Evolving Dynamics and Outlook

Beyond traditional metrics, the broader commercial real estate market is undergoing significant transformations. The retail cosmos, for example, is being reshaped by advancements in AI and data analytics, which are becoming core drivers for efficiency, predictive inventory management, and personalized customer interactions. Business models are also shifting from single sales to recurring revenue streams through subscription and sharing concepts [2]. These technological and operational shifts are influencing investment strategies, pushing investors to consider assets that can adapt to evolving consumer behaviors and technological integration.

RadCRE Perspective

"The current CRE investment landscape, marked by a 'curious rise' despite inflationary pressures and higher rates, underscores a flight to quality and resilience. While broad capital flows are influenced by macroeconomic factors, our focus at RadCRE remains on identifying sectors with robust underlying fundamentals and clear value-add potential. The strong performance in hotels, exemplified by the $8.1 billion global investment volume in 2025, and the seniors housing sector's recovery with $24 billion in transactions by year-end 2025, demonstrate that strategic opportunities persist. Investors are increasingly discerning, seeking assets that offer stable income, occupancy recovery, and the ability to adapt to modern demands, as seen in the evolving retail space. Our analysis consistently points towards targeted investment in properties that can capitalize on these specific market dynamics, whether through value-add plays or securing assets with long-term defensive characteristics."

Tags: CRE Investment Outlook, Hotel Investment, Retail Real Estate, Seniors Housing, Capital Markets Trends