Matthews Real Estate Investment ServicesReport

Orange County Multifamily Market Report

Aug 12, 2026

Vacancy rose to 3.64% in Q2 2026 with rent at $2,886 and cap rates at 4.72% as construction reaches its highest level since 2016.

Multifamily United States

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Publisher: Matthews Real Estate Investment Services
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Published: Aug 12, 2026
Last updated: Aug 16, 2026 (3 days ago)

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Navigating the Great Divide: A Reality Check for U.S. Hotel Investors The U.S. hospitality sector has largely transitioned from post-pandemic recovery to a more normalized operating environment. Although travel demand remains resilient, growth has moderated, with forecasts pointing to modest RevPAR gains and relatively flat occupancy levels. As broad market tailwinds fade, long-term performance is increasingly driven by operational execution, strategic positioning, and differentiated guest experiences. This shift is creating a wider gap between high-performing luxury and upper-upscale hotels and many midscale and economy properties facing greater competitive and economic pressures. For commercial real estate investors, success now depends less on market-wide momentum and more on disciplined analysis of consumer trends, supply dynamics, operating costs, asset positioning, and the fundamental economics of hotel investments. Hotels: The Highest Touch Real Estate Asset Before dissecting market trends, it is important to revisit a foundational truth: hotels are not passive real estate investments. As one industry veteran aptly put it, “Hotels are businesses that come with real estate.” This reality demands constant, active management and a proactive sales focus. Unlike a triple-net lease property that can be placed on a shelf to appreciate, a hotel’s value is created, or lost, daily. This unique characteristic manifests in several key ways: Highest Yield and Highest Risk The operational intensity of hotels allows for daily repricing of inventory, offering the potential for some of the highest yields in commercial real estate. However, this same feature exposes owners to heightened risk, as hotels respond immediately to economic downturns, shifts in consumer sentiment, and local market disruptions. Highest Velocity Due to their daily revenue model, hotel performance can change rapidly, contributing to some of the highest transaction velocity among major commercial asset classes. This pace requires investors and brokers to remain nimble and decisive. Active Management Is Non-Negotiable A hotel’s success depends on strong brand performance, effective marketing, operational efficiency, and a proactive sales strategy that captures group and corporate demand. In today’s more normalized hospitality environment, owners can no longer rely on macroeconomic tailwinds to drive asset appreciation; instead, value must be actively created and protected through exceptional guest experiences, operational sophistication, and strategic market positioning. Properties that adapt to evolving traveler preferences and shifting demand patterns are better positioned to maintain pricing power, sustain competitiveness, and enhance long-term asset value. In today’s market, this active management component is more critical than ever, especially as many segments grapple with an oversupply problem. With new construction continuing, particularly in the midscale sector, the market share “pie” for individual properties is shrinking. The question is no longer simply how to grow the overall market, but how to capture a larger share of a market that is becoming increasingly competitive. Experience Is Reshaping Competitive Positioning One of the most significant trends shaping hospitality performance is the growing demand for experience-driven travel, with guests increasingly prioritizing wellness, curated food and beverage offerings, flexible social spaces, destination programming, and authentic local design. As hotels become destinations in their own right, lifestyle, boutique, luxury, and upper-upscale properties have benefited from stronger demand by delivering greater personalization and community engagement. Public spaces, dining concepts, and wellness amenities are being reimagined to enhance the guest experience while generating revenue beyond room demand, creating a meaningful competitive advantage and contributing to the widening performance gap between top-performing assets and the broader market. A Tale of Two Markets: Unpacking Revenue Pressures The current hospitality landscape is best understood as a split market. While top-line performance appears resilient, much of that strength remains concentrated in the luxury and upper-upscale segments, which cater to travelers who are generally less sensitive to economic pressures. The other side of the story is one of stagnation and growing pressure. U.S. Revenue Per Available Room (RevPAR) is projected to see only modest growth over the next year, driven primarily by slight increases in Average Daily Rate (ADR). Occupancy, however, remains under pressure. This dynamic is especially pronounced in the midscale and economy tiers, which continue to face flat-to-negative RevPAR trends. Recent industry forecasts reinforce this bifurcated outlook. According to the latest CoStar and Tourism Economics forecast (June 2026), U.S. RevPAR is now projected to grow 2.8% in 2026, with ADR up approximately 2% and occupancy rising modestly to around 62.8%. This follows a 0.3% RevPAR decline in 2025, the first non-recessionary decline in modern industry history. The improved outlook reflects stronger-than-expected leisure travel, rebounding group demand, and anticipated demand from major events such as the 2026 FIFA World Cup. While the overall outlook has improved, growth remains heavily concentrated in the luxury and upper-upscale segments, which are forecast to deliver significantly stronger results (in the 5%+ range for luxury). This “barbell” performance pattern continues to define the market, with luxury and upper-upscale hotels materially outperforming many midscale and economy properties that remain challenged by rate pressure and slower demand growth. In contrast, many midscale and economy properties continue to face flat-to-negative or only marginally positive RevPAR trends amid ongoing supply pressure and consumer selectivity. Major events such as the FIFA World Cup, along with stronger-than-expected leisure and group demand, have helped improve the industry’s near-term outlook. However, they have not altered the broader dynamics shaping the industry. The divergence in performance is becoming less of a short-term dislocation and more of a defining characteristic of the current operating environment. Although new supply growth is expected to remain constrained at approximately 0.4% to 0.7% due to elevated development and borrowing costs, the benefits are not being distributed evenly across the industry. Existing luxury and upper-upscale assets continue to capture a disproportionate share of demand and pricing power, while many midscale and economy properties face ongoing competitive pressures. The underlying challenge stems from two primary factors: A growing supply pipeline concentrated in many midscale and economy markets. Continued financial pressure on middle-income consumers. Furthermore, hotel delinquency rates for CMBS loans have remained elevated, reflecting the stress accumulating in assets that lack the pricing power and demand drivers of their luxury counterparts. These pressures point to broader structural shifts rather than a temporary cyclical slowdown. Structural Pressures Are Reshaping Midscale Hospitality The challenges facing many midscale and economy hotels extend beyond the typical fluctuations associated with the business cycle. A combination of changing consumer spending patterns, increasing competition, elevated operating costs, and shifting travel behaviors continues to create pressure across these segments. While demand remains present, operators are finding it increasingly difficult to achieve the same level of pricing power and revenue growth seen during previous cycles. Several long-term economic trends continue to influence performance: The Shrinking Middle Class The share of American adults in middle-income households has been steadily declining for decades, from 61% in 1971 to around 51% today, according to Pew Research Center. Wealth has consolidated in upper-income tiers, the very demographic that fuels luxury and upscale travel. Record Consumer Debt U.S. credit card debt has surpassed $1.2 trillion. More alarmingly, serious delinquencies (90+ days past due) are at the highest level in over a decade, according to the New York Fed. This debt burden drastically curtails the discretionary spending power of middle- and lower-income households, forcing them to cut back on travel or seek cheaper alternatives. Changing Travel Behaviors Travel demand remains healthy, as evidenced by strong airport traffic and continued travel activity. However, the way consumers travel is evolving. More travelers are choosing to stay with friends and family, seek alternative accommodations, or shorten trips when budgets become constrained. Demand is not disappearing, but it is becoming more selective. Finding Opportunity Amid Dislocation For disciplined investors, a challenging operating environment can create compelling opportunities. Many of the same pressures affecting mid-market operators are creating acquisition opportunities, particularly as Property Improvement Plans (PIPs) come due. Many upper-midscale hotels that are 10 to 15 years old are facing substantial renovation requirements from franchisors. After years of postponements, brands are increasingly enforcing these standards to maintain consistency across their portfolios. For owners already managing flat revenues, rising insurance costs, labor pressures, and elevated interest rates, funding a significant PIP can be difficult. As a result, some owners may choose to sell rather than reinvest. For many economy, midscale, and upper-midscale owners, today’s environment may represent an attractive window to evaluate a sale, as industry fundamentals have improved but the majority of future RevPAR growth is expected to remain concentrated in luxury and upper-upscale properties. This creates opportunities for well-capitalized buyers to: Acquire assets below replacement cost. Execute required renovations and reposition properties within their markets. Implement stronger operational and sales strategies. Utilize 1031 exchanges to transition from challenged assets into higher-quality branded properties that may offer greater resilience. Adaptive Reuse and Mixed-Use Opportunities Investors are also increasingly evaluating opportunities tied to adaptive reuse and mixed-use development strategies. Across many markets, hospitality is becoming an integral component of broader placemaking efforts that combine residential, retail, entertainment, and experiential uses into more active and walkable environments. Hotels can create value beyond room revenue by increasing foot traffic, supporting surrounding businesses, and enhancing destination appeal. At the same time, adaptive reuse projects continue attracting attention as owners reposition office buildings, underutilized retail properties, and historic assets into hospitality concepts that align with evolving traveler preferences. These projects often offer unique character, stronger experiential appeal, and opportunities to create value through repositioning rather than ground-up development. Operational Excellence as a Competitive Advantage Operational sophistication is becoming increasingly important as hospitality owners navigate elevated labor, insurance, maintenance, and financing costs. Rather than relying solely on rate growth to drive profitability, operators are placing greater emphasis on efficiency, analytics, and technology integration. Revenue management systems, guest analytics platforms, automation tools, and data-driven pricing strategies allow operators to respond more effectively to changing demand patterns while improving operational precision. Mobile integration, personalization initiatives, and streamlined guest experiences are helping operators enhance service levels while maintaining efficiency. In a more normalized market, operational excellence is no longer simply a competitive advantage. It is becoming a fundamental requirement for long-term success. Creating Value in a More Disciplined Market The U.S. hotel market is no longer benefiting from a broad recovery that lifts all assets equally; instead, performance is increasingly driven by strategy, execution, and differentiation. While some segments continue to face challenges, long-term demand drivers tied to travel, lifestyle preferences, and experiential consumption remain strong. For investors, success will depend on understanding both the macroeconomic forces influencing demand and the asset-level factors that create value, including strategic acquisitions, repositioning, adaptive reuse, operational improvements, and experience-focused concepts. As the industry continues to normalize, the strongest-performing assets will be those that combine differentiated guest experiences, operational excellence, and thoughtful market positioning to create, protect, and enhance value in an increasingly competitive landscape. Mitchell Glasson First Vice President 8/18/26

Image published by matthews.com with the article “AI, Housing Scarcity, and the Repricing of San Francisco Multifamily San Francisco’s multifamily market has entered a different phase of its recovery. Apartment demand is accelerating, available units are becoming more difficult to find, and housing construction has slowed well below historical levels. These conditions are strengthening the operating environment for existing properties and drawing investment capital back into a market that many investors had avoided only a few years ago. The growth of the artificial intelligence sector has become an important part of this shift. Expanding companies are attracting engineers, executives, founders and other highly compensated workers who often want to live near employment centers, public transportation and the city’s established residential neighborhoods. Return-to-office policies are also reinforcing the value of proximity, after several years of remote work allowing employees to move farther from the urban core. The effect is becoming increasingly visible in the rental market. Apartment List reported that San Francisco’s median rent reached $3,558 in June 2026, an increase of 18.9% from the prior year. RealPage also ranked San Francisco as the nation’s strongest major apartment market for rent growth, with effective asking rents rising 10.6% during the year ending in the second quarter. While the platforms use different methodologies, both point to strengthening apartment demand and a meaningful recovery in pricing power. For multifamily owners, rising market rents create opportunities to improve revenue as units turn over and leases reset. The benefit will vary considerably by property. San Francisco’s rent regulations limit annual increases for many occupied apartments, making the relationship between in-place rents and current market rents especially important. The impact of asking rent growth on net operating income also depends on collections, tenant retention, turnover costs, and operating expenses. Tight Availability Strengthens Existing Assets Rent growth is being reinforced by limited availability. Professionally managed properties have experienced a sharp decline in vacancy, illustrating how quickly the pool of available apartments has tightened. Well-located properties may benefit most as renters compete for access to neighborhood amenities, transit and employment centers. Demand is also extending beyond newly built Class A properties. San Francisco’s inventory includes a large concentration of vintage apartment buildings in neighborhoods such as Pacific Heights, Russian Hill, the Marina, Nob Hill and the Mission. These assets often offer locations and architectural character that are difficult to replicate through new construction. Buildings with renovated units, well-maintained common areas and efficient operating structures may be positioned to capture renewed demand, without having to compete directly with luxury towers. Limited Supply, with Reform on the Horizon San Francisco’s strengthening rental market has not yet produced a meaningful increase in apartment construction. Housing production and permitting remain well below their longer-term averages, limiting the amount of new competition entering the market. High labor and material costs, elevated financing expenses, development fees and lengthy approvals continue to make many projects difficult to finance. A 2026 analysis from the San Francisco Controller’s Office found that nine of ten representative apartment and condominium prototypes generated negative residual land values, even when modeled as entirely market-rate developments. Under those assumptions, most projects were not financially feasible even if the land was acquired at no cost. City leaders are attempting to improve those fundamentals through zoning reform and lower development costs. The Family Zoning Plan, which took effect in January 2026, allows greater residential density across portions of northern and western San Francisco and expands development opportunities near transit, commercial corridors and public amenities. The city has also considered reducing the on-site inclusionary housing requirement to 5% for qualifying projects and cutting certain development impact fees by 67%. These changes could help restart portions of the housing pipeline, although zoning capacity alone will not resolve the cost and financing challenges facing developers. For existing multifamily owners, the reforms create a mix of near-term protection and longer-term optionality. New supply is unlikely to reach the market quickly, allowing current properties to continue benefiting from limited competition. Some parcels may also gain redevelopment potential through additional density, greater height or expanded residential uses. That potential will vary by property. Lot dimensions, tenant protections, relocation requirements, historic restrictions and construction costs can limit what an owner is able to pursue. Even so, upzoning may broaden the options available when a property is renovated, refinanced or sold, adding value beyond the income generated by the existing building. Institutional Capital Is Returning Large investment platforms are increasing their exposure to the city’s apartment market, particularly in established neighborhoods with durable rental demand. Recent acquisitions and portfolio performance suggest institutional investors are willing to place significant capital behind the Bay Area’s housing recovery. The improvement across the larger portfolio was supported by stronger collections, the removal of concessions and higher rents on renovated units as leases turned over. These transactions do not mean every apartment building will experience the same recovery. However, they do highlight institutional investors see long-term value in the city’s combination of constrained supply, recovering occupancy and renewed rental demand. Greater competition for assets can support pricing and place downward pressure on cap rates, particularly for buildings in premium neighborhoods. Financing costs, rent regulation, seismic requirements and deferred maintenance may keep yields higher than they were before the interest-rate reset. Property-level performance will continue to depend on the condition of the building, the existing rent roll and the owner’s ability to manage operating complexity. A Market Defined by Scarcity and Optionality San Francisco’s multifamily recovery is being shaped by a widening imbalance between housing demand and the city’s ability to add supply. AI-sector growth, increased office attendance and renewed interest in urban living are strengthening demand. Construction remains limited by costs and financing conditions that zoning reform alone cannot resolve. Existing owners may benefit from higher market rents, reduced vacancy and greater investor competition. Some properties could also gain value through: Upzoning Redevelopment potential Eligibility for affordable housing preservation programs. The opportunity is increasingly property-specific, creating room for well-positioned assets to outperform. Rent control, insurance, maintenance, seismic exposure and tenant turnover can produce meaningful differences between buildings only a few blocks apart. Properties with durable locations, manageable operating expenses, a favorable spread between in-place and market rents, and long-term development optionality may be especially well positioned to benefit as the market continues to recover. San Francisco multifamily is moving beyond its post-pandemic disruption. Its long-term value is supported by something the city continues to struggle to produce: housing in the neighborhoods where people most want to live Dayna Hood Aitken Associate 8/18/26”

Image published by matthews.com with the article “Nashville, TN Multifamily Market Report Q2 2026 Nashville Vacancy Falls to 5.4% as Multifamily Pricing Holds Near Its 2022 Peak Nashville’s multifamily market moved closer to balance in Q2 2026. Net absorption of 2,755 units outpaced the 1,189 units delivered, vacancy fell to 5.40% from 6.21% in Q1, and average effective rent held at $1,612. Pricing is the real standout: at $219,173 per unit, Nashville sits just 5.4% below its 2022 peak, one of the narrowest gaps among major Sunbelt metros. The breakdown below covers demand, supply, investment activity, and submarket performance across the Nashville multifamily market. Demand Nashville’s demand and supply lines are finally converging. Net absorption of 2,755 units in Q2 was up 14.7% YoY and now comfortably exceeds the 1,189 units delivered in the same quarter. Vacancy is still up 42 bps YoY at 5.40%, but it fell sharply from 6.21% in Q1. This is real progress after the market spent 2023 and 2024 absorbing back-to-back years of peak completions. Rent fell to $1,612, down 0.60% YoY, the smallest decline Nashville has posted in three years, and the forecast calls for rent growth to turn positive at +2.2% by year-end. Supply TTM completions fell 27.9% to 6,988 units, down from the 12,597 units delivered in 2024. Units under construction have fallen to 11,486, or 5.51% of inventory, down from the 15.87% peak recorded in Q3 2022. That is still a moderately sized pipeline relative to some peers, so Nashville is not finished digesting new supply the way a market like Los Angeles or Columbus is, but the trajectory is unmistakably downward. Completions are forecast to slow further to 5,164 units by year-end, with vacancy tightening to 5.0%. Investment Market Nashville’s investment market had a standout quarter. Q2 volume of $404.4M more than doubled from $200.1M a year ago, pushing TTM volume up modestly to $1.87B. What stands out most, though, is pricing. Price per unit sits at $219,173, just 5.4% below the 2022 peak of $231,654 — one of the smallest gaps in the country, where most peer markets remain 10-18% below their highs. Cap rates have held essentially flat near 5.44% for two years. That combination of resilient pricing and a market moving toward supply-demand balance suggests Nashville came through its construction boom in better shape, valuation-wise, than most of its Sunbelt peers. Volume $1.9B TTM volume (+5% YoY) Q2 2026: $404M Series peak $6.4B (2022) Pricing Cap rate 5.44% Price per unit $219k Price per unit near 2022 peak Submarket Detail West Nashville posted the market’s lowest vacancy at 4.8%, followed by Murfreesboro/Smyrna at 4.9% and Sumner County at 5.0%. East Nashville led rent growth at +1.6% YoY, the only submarket above +1%, while Central Nashville lagged the market at -3.6%. Construction remains most concentrated in Franklin/Brentwood, where units under construction equal 12.5% of inventory, and Hermitage/Mount Juliet/Lebanon at 10.1%. Southeast Nashville and South Nashville have the thinnest pipelines, at 0.9% and 1.1% of inventory respectively. For more Matthews™ research, explore our full library of market reports, including the Charlotte multifamily market report for a look at another Sunbelt metro working through its construction cycle. Hutt Cooke Managing Director 8/17/26”

Image published by matthews.com with the article “Queens, NY Industrial Market Update H1 2026 By the Numbers Total Dollar Volume: $293.4M (up 58% from $185.6M in H1 2025, largely driven by an institutional trade.* Volume was $201.4M exclude this transaction, up 9% from H1 2025). Number of Transactions: 45 deals over $1M (up from 33 in H1 2025). Average Price Per SF: $372 (a decrease from $419 in H1 2026 and $437 in H1 2024; pricing continues to soften despite climbing deal count). Average Deal Size: $4.6M (relatively flat to slights down from $5.6M in H1 2025). Buyer Trends: 62% of transactions were user-buyers, 50% of which were first-time buyers Top Neighborhoods by Transaction Volume Long Island City: 8 Maspeth: 5 College Point: 5 Sunnyside: 4 Glendale: 4 Three Key Takeaways Rezonings Are Starting to Bite into Industrial Supply Queens industrial pockets saw two of the city’s largest neighborhood rezonings in a generation, both approved by City Council in late 2025 and now moving into implementation. Industrial land is the natural target for this kind of upzoning. OneLIC (54 blocks, ~15,000 homes) Jamaica Neighborhood Plan (230 blocks, ~12,000 homes) It’s under-built relative to its FAR, which is exactly where density can be unlocked. The agents counted 29 Queens industrial properties sold for development/land value in H1 2026, up from just 6 in H1 2025. They expect the trend to continue: the Mamdani administration is backing further site specific rezonings with ELURP, a new expedited review process which was approved by voters in Nov. 2025. This will cut the standard ULURP timeline from 7 months to 90 days. As industrial supply gets rezoned away, the remaining stock should see scarcity-driven appreciation, and adjacent, non-rezoned pockets picking up spillover foot traffic and infrastructure investment become candidates for the same adaptive reuse (warehouse-to-retail, creative, entertainment) that’s already reshaped Williamsburg, and is now reshaping LIC. The agents are currently running development feasibility studies (current zoning and ULURP/ELURP pathways) for a few hundred industrial owners across Queens and Brooklyn. The Owner-User Premium Has Nearly Vanished User-buyers paid a 10.7% $/SF premium over investors in 2024; real evidence of how aggressively users were competing for buildings. That premium has compressed every year since: down to 2.7% in 2025, and just 0.7% through H1 2026. The erosion is sharpest in larger buildings (10,000 SF+), where users are now paying 8–9% less per SF than investors. Smaller product still favors user-buyers, but even there the premium has faded. The agents’ hypothesis: this is sellers losing leverage, not users pulling back. A couple of years ago, investors had to win deals on speed and certainty (all-cash, no diligence contingencies, fast closings) while SBA-financed user-buyers had to pay up just to compete for the same buildings. That dynamic has flipped: asking prices across active listings have fallen roughly 6–7% since mid-2025, and fewer sellers are even adding new listings to test pricing, both signs leverage has shifted toward buyers, investor and user alike, which converges what each is willing to pay rather than letting one group pay up to win. It’s compounded by a real slowdown on the demand side: NYC industrial leasing activity has been running below historical norms, with landlords offering more concessions and large-format product in Queens specifically struggling to lease up. Fewer businesses in active expansion mode means a thinner pool of owner-user buyers, too. Queens Is Where the Investors Are Buying Queens industrial trades at a real discount to Brooklyn; $372/SF here vs. $488/SF across the river, a gap of roughly 24%. That lower basis, paired with the development and rezoning optionality reshaping the borough, gives investors a more favorable entry point than Brooklyn’s tighter, higher-priced stock, and the buyer mix shows it. 38% of Queens H1 2026 buyers were investors, almost double Brooklyn’s 20%. The read: Queens is earlier in its cycle, and the buyers chasing basis and upside are concentrating here while owner-users still dominate the more mature Brooklyn market. Worth watching whether that investor share keeps climbing as rezonings play out, or whether pricing catches up to Brooklyn and compresses the opportunity that’s drawing them in. *Data excludes self-storage transactions and deals under $1M. One institutional trade is excluded from the averages above. Eli Roerden Associate 8/17/26”

Image published by matthews.com with the article “Q2 2026 Auction Services Market Report: CRE Deal Volume Rises 14% as Distress Deepens Commercial real estate transaction volume reached $136.6 billion in Q2 2026, up 14% year-over-year and extending a run of double-digit quarterly gains. But beneath that headline, the market split in two directions: deal activity accelerated while credit stress deepened, and pricing diverged sharply by property type rather than moving together as one asset class. The Q2 2026 Auction Services Market Report from Matthews Real Estate Investment Services™ breaks down what drove the quarter — from three entity-level M&A deals that reshaped volume, to the DC Virginia suburbs unseating Dallas as the country’s most active market, to CMBS special servicing rates climbing back toward cycle highs. Below are the findings that matter most to owners weighing a disposition and investors hunting for repriced assets. Transaction Volume: What Drove the 14% Increase in Q2 2026? Much of the quarterly increase traces back to three major M&A-type deals that closed in May — Veris Residential in apartments, ECHO Realty in retail, and Peakstone Realty Trust in industrial. Together they drove entity-level volume to $5.8 billion, up from just $0.9 billion a year earlier. Even excluding that boost, the underlying market held up: portfolio sales climbed 38% year-over-year and individual asset sales still grew 4%. Q2 2026 Transaction Volume by Property Type Property Type Q2 2026 Volume YOY Change H1 2026 Volume YOY Change Apartment $36.7B +1% $72.1B +6% Industrial $32.5B +27% $65.4B +31% Office $18.5B -9% $40.1B +14% Retail $18.0B +13% $35.9B +8% Hotel $8.0B +27% $15.4B +28% Development Site $7.9B -19% $20.2B +18% Data Center $7.7B +1,806% $8.5B +476% Senior Housing & Care $7.3B +51% $21.8B +135% Total $136.6B +14% $279.3B +23% Source: RCA Portfolio and entity-level deals totaled $34.6 billion in Q2 2026 (+59% YOY), while single-asset sales reached $102.0 billion (+4% YOY). Which property type saw the biggest volume gain? Data centers, by a wide margin. Data center volume jumped 1,806% year-over-year to $7.7 billion in Q2 2026 — a figure driven almost entirely by a single portfolio transaction. Senior housing and care posted the second-strongest gain at +51%. Pricing: Why Did Property Types Diverge So Sharply? The RCA CPPI US National All-Property Index rose 0.9% year-over-year, marking six straight quarters of annual growth. Performance underneath that number varied widely: Suburban offices led all sectors at 3.0% annual price growth Apartments fell 1.7% Hotels dropped 9.3% — the weakest performer, largely due to limited-service hotel weakness Industrial posted its first negative reading of the cycle at -0.4%, though that mostly reflects a late-2025 dip that has since faded The takeaway for sellers: property types are now being priced on individual fundamentals rather than moving together as one asset class. Asset-level quality, tenancy, and location carry more weight in pricing than sector labels do. Compare trends across our Market Insights library. Market Rankings: The DC Virginia Suburbs Ended Dallas’s Six-Year Reign The DC Virginia suburbs jumped 10 spots to claim the No. 1 market for H1 2026 deal volume at a record $11.5 billion, ending Dallas’s six-year run atop the rankings. The surge was almost entirely driven by Digital Realty’s $5.6 billion acquisition of a four-property data center portfolio from Blackstone, which pushed data centers to more than half of the market’s total volume. Other notable market movers in H1 2026 Chicago — up four spots on balanced apartment and industrial demand San Francisco — up five spots on an office-led recovery Broward County — up 11 spots on industrial strength CRE Distress: Special Servicing Climbed as Delinquencies Eased Commercial real estate’s credit picture sent mixed signals in June 2026. Special servicing rates climbed even as overall delinquencies eased — a reminder that loans can move between servicing status and default in different directions within the same month. Special servicing rate rose 34 bps to 11.20% The Trepp CMBS special servicing rate rose 34 basis points in June to 11.20%, undoing the improvement recorded in May. Four of the six major property types saw their rates increase: Property Type June 2026 Special Servicing Rate Monthly Change Office 17.11% +36 bps Retail 12.95% -5 bps Mixed-Use 11.90% +28 bps Lodging 8.89% +44 bps Multifamily 8.23% -27 bps Industrial 1.37% +9 bps Source: Trepp Multifamily was the biggest gainer on the improvement side, helped along by the return of the large Yorkshire & Lexington Towers loan. New special servicing transfers totaled roughly $3.08 billion across 42 loans in June. The largest was the $975 million IMC Portfolio loan, which moved into special servicing on an imminent balloon/maturity default. That loan is secured by a 16-property showroom portfolio spanning 9.6 million square feet across Las Vegas and High Point, N.C., with buildings dating from 1907 to 2017. Delinquency rate fell 20 bps to 7.35% In contrast, the Trepp CMBS delinquency rate decreased in June, dropping 20 basis points to 7.35%, aided by a significant lodging loan curing its delinquent status. Still, three of the five major property types saw delinquency rates tick higher: Retail recorded the largest increase, up 30 bps to 6.91% Multifamily rose 28 bps to 7.23%, reversing the prior month’s gains as several sizable assets became delinquent Office inched up four bps to 11.57% Lodging posted the largest decrease of any property type, down 79 bps to 5.22% Industrial slipped 11 bps to 1.20% Newly delinquent loans totaled $2.64 billion in June, with the five largest accounting for $998.9 million: a super-regional mall in Southern California, a regional mall in New Hampshire, an office complex in New York, a mixed-use tower in Minneapolis, and a multifamily property in Manhattan. Property Pricing Stayed Flat as Cap Rates Stuck Away from loan performance, the Green Street Commercial Property Price Index held steady in June, unchanged from May. Over the trailing 12 months, the all-property index is up 4.1% — though pricing overall remains 14% below its 2022 peak. Peter Rothemund, co-head of strategic research at Green Street, attributed the sluggish pace of price appreciation to persistently sticky cap rates, and said that dynamic is unlikely to shift soon given that elevated interest rates are likely to keep pricing in a tight band. Malls, office, strip retail, data centers, healthcare, and manufactured home parks all posted the strongest annual gains. Office, however, still has the furthest distance to travel of any property type to fully recover to its 2022 peak valuation. Capital Markets Snapshot (as of July 27, 2026) Index Rate Prime 6.75% 30-Day SOFR 3.64% 5-Year Treasury 4.40% 7-Year Treasury (Interp.) 4.53% 10-Year Treasury 4.65% 5-Year Swap 4.40% 7-Year Swap 4.44% 10-Year Swap 4.52% Sources: St. Louis FED (FRED), Investing, Bloomberg The full report includes indicative loan pricing across Fannie Mae SBL and conventional agency programs, life company lenders, and CMBS — with LTV, amortization, spread, and debt yield parameters for each. Notable Q2 2026 Auction Closings Auction execution continued to outperform reserve pricing across asset types and geographies: Property Location Result 4800 US Highway 67 DeSoto, MO 208% of reserve 200 Apple Seed Ct Clarkesville, GA 122% of reserve 3706 W 76 Country Blvd Branson, MO Closed within 75 days 1528 Ragan St Memphis, TN Loan sale (NPL) These outcomes illustrate why owners facing maturity pressure, and lenders managing non-performing loans, increasingly turn to Auction Services as a price-discovery and speed-to-close mechanism rather than a last resort. What Does This Mean for Owners and Investors? For owners considering a disposition: volume is up and buyer depth is real, but pricing is asset-specific. Sticky cap rates mean waiting for broad market appreciation is unlikely to pay off in the near term. Auction offers defined timelines and competitive tension in a market where broad appreciation has stalled. For investors: the widening gap between special servicing and delinquency trends signals a growing pipeline of lender-motivated assets, particularly in office, mixed-use, and lodging. Office remains furthest below its 2022 peak, which is where basis-driven opportunity concentrates. For lenders and special servicers: with $3.08 billion in new special servicing transfers in a single month and maturity defaults driving the largest transfers, resolution timelines matter as much as pricing. Frequently Asked Questions What was total CRE transaction volume in Q2 2026? Commercial property transaction volume reached $136.6 billion in Q2 2026, up 14% year-over-year. H1 2026 volume totaled $279.3 billion, up 23% year-over-year. Which market ranked No. 1 for CRE deal volume in H1 2026? The DC Virginia suburbs, at a record $11.5 billion — jumping 10 spots and ending Dallas’s six-year run as the top market. Is CRE distress increasing or decreasing in 2026? Both, depending on the measure. The Trepp CMBS special servicing rate rose 34 bps in June 2026 to 11.20%, while the CMBS delinquency rate fell 20 bps to 7.35% over the same period. How far below peak is commercial real estate pricing? The Green Street Commercial Property Price Index remains 14% below its 2022 peak, though it is up 4.1% over the trailing 12 months. Office has the furthest distance to travel to recover to 2022 levels. Which property type had the weakest pricing in Q2 2026? Hotels, with prices down 9.3% year-over-year, driven largely by limited-service hotel weakness. Robert Anderson Vice President of Auction Services 8/14/26”

Matthews Real Estate Investment Services

Cleveland Multifamily Q2 2026

Cleveland vacancy dropped to 3.68% in Q2 2026 while average rent rose to $1,451 and cap rates increased to about 8.0%.

MultifamilyUnited States

Updated 3 days agoPublished Aug 14, 2026

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The U.S. hospitality sector has largely transitioned from post-pandemic recovery to a more normalized operating environment. Although travel demand remains resilient, growth has moderated, with forecasts pointing to modest RevPAR gains and relatively flat occupancy levels. As…

Hospitality

Updated 1 day agoPublished Aug 18, 2026

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Matthews Real Estate Investment Services

AI, Housing Scarcity, and the Repricing of San Francisco Multifamily San Francisco’s multifamily market has entered a different phase of its recovery. Apartment demand is accelerating, available units are becoming more difficult to find, and housing construction has slowed well below historical levels. These conditions are strengthening the operating environment for existing properties and drawing investment capital back into a market that many investors had avoided only a few years ago. The growth of the artificial intelligence sector has become an important part of this shift. Expanding companies are attracting engineers, executives, founders and other highly compensated workers who often want to live near employment centers, public transportation and the city’s established residential neighborhoods. Return-to-office policies are also reinforcing the value of proximity, after several years of remote work allowing employees to move farther from the urban core. The effect is becoming increasingly visible in the rental market. Apartment List reported that San Francisco’s median rent reached $3,558 in June 2026, an increase of 18.9% from the prior year. RealPage also ranked San Francisco as the nation’s strongest major apartment market for rent growth, with effective asking rents rising 10.6% during the year ending in the second quarter. While the platforms use different methodologies, both point to strengthening apartment demand and a meaningful recovery in pricing power. For multifamily owners, rising market rents create opportunities to improve revenue as units turn over and leases reset. The benefit will vary considerably by property. San Francisco’s rent regulations limit annual increases for many occupied apartments, making the relationship between in-place rents and current market rents especially important. The impact of asking rent growth on net operating income also depends on collections, tenant retention, turnover costs, and operating expenses. Tight Availability Strengthens Existing Assets Rent growth is being reinforced by limited availability. Professionally managed properties have experienced a sharp decline in vacancy, illustrating how quickly the pool of available apartments has tightened. Well-located properties may benefit most as renters compete for access to neighborhood amenities, transit and employment centers. Demand is also extending beyond newly built Class A properties. San Francisco’s inventory includes a large concentration of vintage apartment buildings in neighborhoods such as Pacific Heights, Russian Hill, the Marina, Nob Hill and the Mission. These assets often offer locations and architectural character that are difficult to replicate through new construction. Buildings with renovated units, well-maintained common areas and efficient operating structures may be positioned to capture renewed demand, without having to compete directly with luxury towers. Limited Supply, with Reform on the Horizon San Francisco’s strengthening rental market has not yet produced a meaningful increase in apartment construction. Housing production and permitting remain well below their longer-term averages, limiting the amount of new competition entering the market. High labor and material costs, elevated financing expenses, development fees and lengthy approvals continue to make many projects difficult to finance. A 2026 analysis from the San Francisco Controller’s Office found that nine of ten representative apartment and condominium prototypes generated negative residual land values, even when modeled as entirely market-rate developments. Under those assumptions, most projects were not financially feasible even if the land was acquired at no cost. City leaders are attempting to improve those fundamentals through zoning reform and lower development costs. The Family Zoning Plan, which took effect in January 2026, allows greater residential density across portions of northern and western San Francisco and expands development opportunities near transit, commercial corridors and public amenities. The city has also considered reducing the on-site inclusionary housing requirement to 5% for qualifying projects and cutting certain development impact fees by 67%. These changes could help restart portions of the housing pipeline, although zoning capacity alone will not resolve the cost and financing challenges facing developers. For existing multifamily owners, the reforms create a mix of near-term protection and longer-term optionality. New supply is unlikely to reach the market quickly, allowing current properties to continue benefiting from limited competition. Some parcels may also gain redevelopment potential through additional density, greater height or expanded residential uses. That potential will vary by property. Lot dimensions, tenant protections, relocation requirements, historic restrictions and construction costs can limit what an owner is able to pursue. Even so, upzoning may broaden the options available when a property is renovated, refinanced or sold, adding value beyond the income generated by the existing building. Institutional Capital Is Returning Large investment platforms are increasing their exposure to the city’s apartment market, particularly in established neighborhoods with durable rental demand. Recent acquisitions and portfolio performance suggest institutional investors are willing to place significant capital behind the Bay Area’s housing recovery. The improvement across the larger portfolio was supported by stronger collections, the removal of concessions and higher rents on renovated units as leases turned over. These transactions do not mean every apartment building will experience the same recovery. However, they do highlight institutional investors see long-term value in the city’s combination of constrained supply, recovering occupancy and renewed rental demand. Greater competition for assets can support pricing and place downward pressure on cap rates, particularly for buildings in premium neighborhoods. Financing costs, rent regulation, seismic requirements and deferred maintenance may keep yields higher than they were before the interest-rate reset. Property-level performance will continue to depend on the condition of the building, the existing rent roll and the owner’s ability to manage operating complexity. A Market Defined by Scarcity and Optionality San Francisco’s multifamily recovery is being shaped by a widening imbalance between housing demand and the city’s ability to add supply. AI-sector growth, increased office attendance and renewed interest in urban living are strengthening demand. Construction remains limited by costs and financing conditions that zoning reform alone cannot resolve. Existing owners may benefit from higher market rents, reduced vacancy and greater investor competition. Some properties could also gain value through: Upzoning Redevelopment potential Eligibility for affordable housing preservation programs. The opportunity is increasingly property-specific, creating room for well-positioned assets to outperform. Rent control, insurance, maintenance, seismic exposure and tenant turnover can produce meaningful differences between buildings only a few blocks apart. Properties with durable locations, manageable operating expenses, a favorable spread between in-place and market rents, and long-term development optionality may be especially well positioned to benefit as the market continues to recover. San Francisco multifamily is moving beyond its post-pandemic disruption. Its long-term value is supported by something the city continues to struggle to produce: housing in the neighborhoods where people most want to live Dayna Hood Aitken Associate 8/18/26

Success in commercial real estate has always been driven by relationships, but today, relationships alone are not enough. The brokers and firms winning in the market today are the ones who can move faster, process more information, and execute at a higher level across an…

Multifamily

Updated todayPublished Aug 18, 2026

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Matthews Real Estate Investment Services

Nashville, TN Multifamily Market Report Q2 2026 Nashville Vacancy Falls to 5.4% as Multifamily Pricing Holds Near Its 2022 Peak Nashville’s multifamily market moved closer to balance in Q2 2026. Net absorption of 2,755 units outpaced the 1,189 units delivered, vacancy fell to 5.40% from 6.21% in Q1, and average effective rent held at $1,612. Pricing is the real standout: at $219,173 per unit, Nashville sits just 5.4% below its 2022 peak, one of the narrowest gaps among major Sunbelt metros. The breakdown below covers demand, supply, investment activity, and submarket performance across the Nashville multifamily market. Demand Nashville’s demand and supply lines are finally converging. Net absorption of 2,755 units in Q2 was up 14.7% YoY and now comfortably exceeds the 1,189 units delivered in the same quarter. Vacancy is still up 42 bps YoY at 5.40%, but it fell sharply from 6.21% in Q1. This is real progress after the market spent 2023 and 2024 absorbing back-to-back years of peak completions. Rent fell to $1,612, down 0.60% YoY, the smallest decline Nashville has posted in three years, and the forecast calls for rent growth to turn positive at +2.2% by year-end. Supply TTM completions fell 27.9% to 6,988 units, down from the 12,597 units delivered in 2024. Units under construction have fallen to 11,486, or 5.51% of inventory, down from the 15.87% peak recorded in Q3 2022. That is still a moderately sized pipeline relative to some peers, so Nashville is not finished digesting new supply the way a market like Los Angeles or Columbus is, but the trajectory is unmistakably downward. Completions are forecast to slow further to 5,164 units by year-end, with vacancy tightening to 5.0%. Investment Market Nashville’s investment market had a standout quarter. Q2 volume of $404.4M more than doubled from $200.1M a year ago, pushing TTM volume up modestly to $1.87B. What stands out most, though, is pricing. Price per unit sits at $219,173, just 5.4% below the 2022 peak of $231,654 — one of the smallest gaps in the country, where most peer markets remain 10-18% below their highs. Cap rates have held essentially flat near 5.44% for two years. That combination of resilient pricing and a market moving toward supply-demand balance suggests Nashville came through its construction boom in better shape, valuation-wise, than most of its Sunbelt peers. Volume $1.9B TTM volume (+5% YoY) Q2 2026: $404M Series peak $6.4B (2022) Pricing Cap rate 5.44% Price per unit $219k Price per unit near 2022 peak Submarket Detail West Nashville posted the market’s lowest vacancy at 4.8%, followed by Murfreesboro/Smyrna at 4.9% and Sumner County at 5.0%. East Nashville led rent growth at +1.6% YoY, the only submarket above +1%, while Central Nashville lagged the market at -3.6%. Construction remains most concentrated in Franklin/Brentwood, where units under construction equal 12.5% of inventory, and Hermitage/Mount Juliet/Lebanon at 10.1%. Southeast Nashville and South Nashville have the thinnest pipelines, at 0.9% and 1.1% of inventory respectively. For more Matthews™ research, explore our full library of market reports, including the Charlotte multifamily market report for a look at another Sunbelt metro working through its construction cycle. Hutt Cooke Managing Director 8/17/26

By the Numbers Total Dollar Volume: $293.4M (up 58% from $185.6M in H1 2025, largely driven by an institutional trade.* Volume was $201.4M exclude this transaction, up 9% from H1 2025). Number of Transactions: 45 deals over $1M (up from 33 in H1 2025). Average Price Per SF: $372…

Multifamily

Updated 1 day agoPublished Aug 17, 2026

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Queens, NY Industrial Market Update H1 2026 By the Numbers Total Dollar Volume: $293.4M (up 58% from $185.6M in H1 2025, largely driven by an institutional trade.* Volume was $201.4M exclude this transaction, up 9% from H1 2025). Number of Transactions: 45 deals over $1M (up from 33 in H1 2025). Average Price Per SF: $372 (a decrease from $419 in H1 2026 and $437 in H1 2024; pricing continues to soften despite climbing deal count). Average Deal Size: $4.6M (relatively flat to slights down from $5.6M in H1 2025). Buyer Trends: 62% of transactions were user-buyers, 50% of which were first-time buyers Top Neighborhoods by Transaction Volume Long Island City: 8 Maspeth: 5 College Point: 5 Sunnyside: 4 Glendale: 4 Three Key Takeaways Rezonings Are Starting to Bite into Industrial Supply Queens industrial pockets saw two of the city’s largest neighborhood rezonings in a generation, both approved by City Council in late 2025 and now moving into implementation. Industrial land is the natural target for this kind of upzoning. OneLIC (54 blocks, ~15,000 homes) Jamaica Neighborhood Plan (230 blocks, ~12,000 homes) It’s under-built relative to its FAR, which is exactly where density can be unlocked. The agents counted 29 Queens industrial properties sold for development/land value in H1 2026, up from just 6 in H1 2025. They expect the trend to continue: the Mamdani administration is backing further site specific rezonings with ELURP, a new expedited review process which was approved by voters in Nov. 2025. This will cut the standard ULURP timeline from 7 months to 90 days. As industrial supply gets rezoned away, the remaining stock should see scarcity-driven appreciation, and adjacent, non-rezoned pockets picking up spillover foot traffic and infrastructure investment become candidates for the same adaptive reuse (warehouse-to-retail, creative, entertainment) that’s already reshaped Williamsburg, and is now reshaping LIC. The agents are currently running development feasibility studies (current zoning and ULURP/ELURP pathways) for a few hundred industrial owners across Queens and Brooklyn. The Owner-User Premium Has Nearly Vanished User-buyers paid a 10.7% $/SF premium over investors in 2024; real evidence of how aggressively users were competing for buildings. That premium has compressed every year since: down to 2.7% in 2025, and just 0.7% through H1 2026. The erosion is sharpest in larger buildings (10,000 SF+), where users are now paying 8–9% less per SF than investors. Smaller product still favors user-buyers, but even there the premium has faded. The agents’ hypothesis: this is sellers losing leverage, not users pulling back. A couple of years ago, investors had to win deals on speed and certainty (all-cash, no diligence contingencies, fast closings) while SBA-financed user-buyers had to pay up just to compete for the same buildings. That dynamic has flipped: asking prices across active listings have fallen roughly 6–7% since mid-2025, and fewer sellers are even adding new listings to test pricing, both signs leverage has shifted toward buyers, investor and user alike, which converges what each is willing to pay rather than letting one group pay up to win. It’s compounded by a real slowdown on the demand side: NYC industrial leasing activity has been running below historical norms, with landlords offering more concessions and large-format product in Queens specifically struggling to lease up. Fewer businesses in active expansion mode means a thinner pool of owner-user buyers, too. Queens Is Where the Investors Are Buying Queens industrial trades at a real discount to Brooklyn; $372/SF here vs. $488/SF across the river, a gap of roughly 24%. That lower basis, paired with the development and rezoning optionality reshaping the borough, gives investors a more favorable entry point than Brooklyn’s tighter, higher-priced stock, and the buyer mix shows it. 38% of Queens H1 2026 buyers were investors, almost double Brooklyn’s 20%. The read: Queens is earlier in its cycle, and the buyers chasing basis and upside are concentrating here while owner-users still dominate the more mature Brooklyn market. Worth watching whether that investor share keeps climbing as rezonings play out, or whether pricing catches up to Brooklyn and compresses the opportunity that’s drawing them in. *Data excludes self-storage transactions and deals under $1M. One institutional trade is excluded from the averages above. Eli Roerden Associate 8/17/26

By the Numbers Total Dollar Volume: $293.4M (up 58% from $185.6M in H1 2025, largely driven by an institutional trade.* Volume was $201.4M exclude this transaction, up 9% from H1 2025). Number of Transactions: 45 deals over $1M (up from 33 in H1 2025). Average Price Per SF: $372…

Industrial & Logistics

Updated 1 day agoPublished Aug 17, 2026

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Matthews Real Estate Investment Services

Q2 2026 Auction Services Market Report: CRE Deal Volume Rises 14% as Distress Deepens Commercial real estate transaction volume reached $136.6 billion in Q2 2026, up 14% year-over-year and extending a run of double-digit quarterly gains. But beneath that headline, the market split in two directions: deal activity accelerated while credit stress deepened, and pricing diverged sharply by property type rather than moving together as one asset class. The Q2 2026 Auction Services Market Report from Matthews Real Estate Investment Services™ breaks down what drove the quarter — from three entity-level M&A deals that reshaped volume, to the DC Virginia suburbs unseating Dallas as the country’s most active market, to CMBS special servicing rates climbing back toward cycle highs. Below are the findings that matter most to owners weighing a disposition and investors hunting for repriced assets. Transaction Volume: What Drove the 14% Increase in Q2 2026? Much of the quarterly increase traces back to three major M&A-type deals that closed in May — Veris Residential in apartments, ECHO Realty in retail, and Peakstone Realty Trust in industrial. Together they drove entity-level volume to $5.8 billion, up from just $0.9 billion a year earlier. Even excluding that boost, the underlying market held up: portfolio sales climbed 38% year-over-year and individual asset sales still grew 4%. Q2 2026 Transaction Volume by Property Type Property Type Q2 2026 Volume YOY Change H1 2026 Volume YOY Change Apartment $36.7B +1% $72.1B +6% Industrial $32.5B +27% $65.4B +31% Office $18.5B -9% $40.1B +14% Retail $18.0B +13% $35.9B +8% Hotel $8.0B +27% $15.4B +28% Development Site $7.9B -19% $20.2B +18% Data Center $7.7B +1,806% $8.5B +476% Senior Housing & Care $7.3B +51% $21.8B +135% Total $136.6B +14% $279.3B +23% Source: RCA Portfolio and entity-level deals totaled $34.6 billion in Q2 2026 (+59% YOY), while single-asset sales reached $102.0 billion (+4% YOY). Which property type saw the biggest volume gain? Data centers, by a wide margin. Data center volume jumped 1,806% year-over-year to $7.7 billion in Q2 2026 — a figure driven almost entirely by a single portfolio transaction. Senior housing and care posted the second-strongest gain at +51%. Pricing: Why Did Property Types Diverge So Sharply? The RCA CPPI US National All-Property Index rose 0.9% year-over-year, marking six straight quarters of annual growth. Performance underneath that number varied widely: Suburban offices led all sectors at 3.0% annual price growth Apartments fell 1.7% Hotels dropped 9.3% — the weakest performer, largely due to limited-service hotel weakness Industrial posted its first negative reading of the cycle at -0.4%, though that mostly reflects a late-2025 dip that has since faded The takeaway for sellers: property types are now being priced on individual fundamentals rather than moving together as one asset class. Asset-level quality, tenancy, and location carry more weight in pricing than sector labels do. Compare trends across our Market Insights library. Market Rankings: The DC Virginia Suburbs Ended Dallas’s Six-Year Reign The DC Virginia suburbs jumped 10 spots to claim the No. 1 market for H1 2026 deal volume at a record $11.5 billion, ending Dallas’s six-year run atop the rankings. The surge was almost entirely driven by Digital Realty’s $5.6 billion acquisition of a four-property data center portfolio from Blackstone, which pushed data centers to more than half of the market’s total volume. Other notable market movers in H1 2026 Chicago — up four spots on balanced apartment and industrial demand San Francisco — up five spots on an office-led recovery Broward County — up 11 spots on industrial strength CRE Distress: Special Servicing Climbed as Delinquencies Eased Commercial real estate’s credit picture sent mixed signals in June 2026. Special servicing rates climbed even as overall delinquencies eased — a reminder that loans can move between servicing status and default in different directions within the same month. Special servicing rate rose 34 bps to 11.20% The Trepp CMBS special servicing rate rose 34 basis points in June to 11.20%, undoing the improvement recorded in May. Four of the six major property types saw their rates increase: Property Type June 2026 Special Servicing Rate Monthly Change Office 17.11% +36 bps Retail 12.95% -5 bps Mixed-Use 11.90% +28 bps Lodging 8.89% +44 bps Multifamily 8.23% -27 bps Industrial 1.37% +9 bps Source: Trepp Multifamily was the biggest gainer on the improvement side, helped along by the return of the large Yorkshire & Lexington Towers loan. New special servicing transfers totaled roughly $3.08 billion across 42 loans in June. The largest was the $975 million IMC Portfolio loan, which moved into special servicing on an imminent balloon/maturity default. That loan is secured by a 16-property showroom portfolio spanning 9.6 million square feet across Las Vegas and High Point, N.C., with buildings dating from 1907 to 2017. Delinquency rate fell 20 bps to 7.35% In contrast, the Trepp CMBS delinquency rate decreased in June, dropping 20 basis points to 7.35%, aided by a significant lodging loan curing its delinquent status. Still, three of the five major property types saw delinquency rates tick higher: Retail recorded the largest increase, up 30 bps to 6.91% Multifamily rose 28 bps to 7.23%, reversing the prior month’s gains as several sizable assets became delinquent Office inched up four bps to 11.57% Lodging posted the largest decrease of any property type, down 79 bps to 5.22% Industrial slipped 11 bps to 1.20% Newly delinquent loans totaled $2.64 billion in June, with the five largest accounting for $998.9 million: a super-regional mall in Southern California, a regional mall in New Hampshire, an office complex in New York, a mixed-use tower in Minneapolis, and a multifamily property in Manhattan. Property Pricing Stayed Flat as Cap Rates Stuck Away from loan performance, the Green Street Commercial Property Price Index held steady in June, unchanged from May. Over the trailing 12 months, the all-property index is up 4.1% — though pricing overall remains 14% below its 2022 peak. Peter Rothemund, co-head of strategic research at Green Street, attributed the sluggish pace of price appreciation to persistently sticky cap rates, and said that dynamic is unlikely to shift soon given that elevated interest rates are likely to keep pricing in a tight band. Malls, office, strip retail, data centers, healthcare, and manufactured home parks all posted the strongest annual gains. Office, however, still has the furthest distance to travel of any property type to fully recover to its 2022 peak valuation. Capital Markets Snapshot (as of July 27, 2026) Index Rate Prime 6.75% 30-Day SOFR 3.64% 5-Year Treasury 4.40% 7-Year Treasury (Interp.) 4.53% 10-Year Treasury 4.65% 5-Year Swap 4.40% 7-Year Swap 4.44% 10-Year Swap 4.52% Sources: St. Louis FED (FRED), Investing, Bloomberg The full report includes indicative loan pricing across Fannie Mae SBL and conventional agency programs, life company lenders, and CMBS — with LTV, amortization, spread, and debt yield parameters for each. Notable Q2 2026 Auction Closings Auction execution continued to outperform reserve pricing across asset types and geographies: Property Location Result 4800 US Highway 67 DeSoto, MO 208% of reserve 200 Apple Seed Ct Clarkesville, GA 122% of reserve 3706 W 76 Country Blvd Branson, MO Closed within 75 days 1528 Ragan St Memphis, TN Loan sale (NPL) These outcomes illustrate why owners facing maturity pressure, and lenders managing non-performing loans, increasingly turn to Auction Services as a price-discovery and speed-to-close mechanism rather than a last resort. What Does This Mean for Owners and Investors? For owners considering a disposition: volume is up and buyer depth is real, but pricing is asset-specific. Sticky cap rates mean waiting for broad market appreciation is unlikely to pay off in the near term. Auction offers defined timelines and competitive tension in a market where broad appreciation has stalled. For investors: the widening gap between special servicing and delinquency trends signals a growing pipeline of lender-motivated assets, particularly in office, mixed-use, and lodging. Office remains furthest below its 2022 peak, which is where basis-driven opportunity concentrates. For lenders and special servicers: with $3.08 billion in new special servicing transfers in a single month and maturity defaults driving the largest transfers, resolution timelines matter as much as pricing. Frequently Asked Questions What was total CRE transaction volume in Q2 2026? Commercial property transaction volume reached $136.6 billion in Q2 2026, up 14% year-over-year. H1 2026 volume totaled $279.3 billion, up 23% year-over-year. Which market ranked No. 1 for CRE deal volume in H1 2026? The DC Virginia suburbs, at a record $11.5 billion — jumping 10 spots and ending Dallas’s six-year run as the top market. Is CRE distress increasing or decreasing in 2026? Both, depending on the measure. The Trepp CMBS special servicing rate rose 34 bps in June 2026 to 11.20%, while the CMBS delinquency rate fell 20 bps to 7.35% over the same period. How far below peak is commercial real estate pricing? The Green Street Commercial Property Price Index remains 14% below its 2022 peak, though it is up 4.1% over the trailing 12 months. Office has the furthest distance to travel to recover to 2022 levels. Which property type had the weakest pricing in Q2 2026? Hotels, with prices down 9.3% year-over-year, driven largely by limited-service hotel weakness. Robert Anderson Vice President of Auction Services 8/14/26

Union County’s industrial market strengthened in Q2 2026, supported by improving tenant demand and limited new supply. The market recorded 690,000 SF of positive net absorption, helping vacancy fall to 5.3% from 6.4% in Q1. Asking rents reached $14.50/SF, with annual rent growth…

Capital MarketsCMBSData Centers

Updated 3 days agoPublished Aug 14, 2026

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