Has the Next CRE Cycle Begun? What to Expect in 2026 with Xander Snyder

Introduction: The Question Every CRE Investor Is Asking

Where are we in the commercial real estate cycle?

That question dominates conversations among investors, brokers, lenders, and developers across the country. Some investors famously refuse to buy until they believe the market has hit absolute bottom. Others look for early signs of recovery to position themselves ahead of the next upswing.

On a recent episode of America’s Commercial Real Estate Show, host Michael Bull—founder of Bull Realty and a TCN Worldwide affiliate—sat down with Xander Snyder, Senior Commercial Real Estate Economist at First American, to unpack exactly where we are today and what the next phase of the cycle may look like.

Their conversation offers timely insight into market cycles, distress, interest rates, supply trends, and where opportunities are emerging right now.

 

Understanding the Commercial Real Estate Cycle

Commercial real estate is inherently cyclical. While no cycle is perfectly predictable, they tend to follow a familiar pattern:

1. Credit Expansion – Easier and cheaper credit fuels demand
2. Rising Prices – Cap rates compress and values increase
3. Market Correction – Prices detach from fundamentals
4. Credit Contraction – Lending tightens and values fall
5. Stabilization & Recovery – Prices reset and demand returns

According to Snyder, the data suggests we are now at the very beginning of the next commercial real estate cycle—the earliest stages of recovery.

“Prices have corrected enough to attract demand back into the market,” Snyder explains. “Transaction volume is increasing, and buyers are cautiously re-entering.”

 

Are We Officially in a Recovery?

From a brokerage perspective, Michael Bull notes that activity is picking up across the Southeast:

• More sellers are willing to list properties
• Buyers are re-engaging and closing deals
• Lenders are cautiously returning—even in office

These are classic early-cycle signals.

However, this recovery looks different from previous ones. Uncertainty around interest rates, trade policy, and global economics continues to influence underwriting decisions.

 

What’s Different About This Cycle

1. Interest Rates Are No Longer a Tailwind

Unlike the 2010–2021 cycle, which benefited from steadily declining interest rates, today’s environment is very different:

• Rates are no longer near zero
• Cap rate compression may not return anytime soon
• Deal structures reliant on refinancing and appreciation are less viable

“If you need a 1% interest rate cut to make your deal work, you’re not underwriting conservatively enough,” Snyder warns.

2. More Equity, Less Leverage

Unlike the Global Financial Crisis, there is plenty of equity in the market today. Investors are deploying capital with significantly less leverage, which reduces systemic risk but also caps returns.

 

Distress: Have We Reached the Peak?

Distress remains elevated—especially in the office sector, where delinquency rates are at their highest levels since the GFC.

But there is encouraging news.

Snyder believes we are near peak distress:

• Prices have reset enough to enable transactions
• Distressed sales are increasing as a share of total sales
• Demand is returning where pricing makes sense

He compares the situation to a bathtub: while new distress may still flow in, the drain has opened. Distressed transactions are beginning to clear the system.

 

A Sector-by-Sector Look at Supply and Opportunity

Office: A Structural Shift, Not Just a Cycle

Office faces unique challenges due to remote work—a structural change rather than a cyclical one. While this may prolong recovery, pricing has reset dramatically, creating opportunities for well-capitalized buyers.

“You can make any deal work if you buy it cheap enough,” Snyder notes.

Retail: Limited New Supply Is a Strength

Retail has seen minimal new construction for over a decade, supporting strong leasing fundamentals—even amid store closures. Many landlords are re-leasing space at higher rents.

Multifamily: Short-Term Oversupply, Long-Term Need

While new deliveries have pressured rents in some markets, the U.S. still faces a long-term housing shortage. Multifamily is expected to normalize faster than other sectors.

Industrial: Uncertainty in the Near Term

Industrial faces headwinds from:

• Oversupply of large-box facilities
• Trade policy uncertainty
• Shifting logistics patterns

That said, long-term drivers like e-commerce, nearshoring, and last-mile logistics remain intact.

 

Where Are the Best Opportunities Right Now?

Snyder highlights two major themes for success in this cycle:

1. Buy Early—But Carefully

The most wealth in commercial real estate is often created by buying early in a new cycle, especially from motivated sellers dealing with:

• Loan maturities
• Fund closures
• Capital reallocation
• Inheritance or partnership issues

2. Operational Excellence Will Matter More Than Ever

With fewer valuation tailwinds, performance will hinge on operations:

• Expense control
• Insurance management
• Maintenance efficiency
• Thoughtful rent growth
• Use of AI and technology to boost NOI

“Operations will be front and center in this cycle,” Snyder emphasizes.

 

Advice for Sellers Waiting on Rate Cuts

For sellers hoping for a return to 2021 pricing, the message is clear:

Don’t hold your breath.

That environment was highly unusual, driven by near-zero rates and pandemic-era distortions. Buyers today are underwriting conservatively, and pricing expectations must adjust accordingly.

 

Final Thoughts: A New Cycle, Not a Replay

This cycle will not be a carbon copy of the last one—and that’s a good thing.

While challenges remain, the market is stabilizing, capital is active, and disciplined investors are finding opportunities. As Michael Bull notes, replacement costs are high, supply is constrained in several sectors, and demand is quietly rebuilding.

For those prepared to adapt, this early stage of the cycle may prove to be one of the most strategic moments to act.