The Opportunity That Will Make Millionaires in 2026

$936 billion. That's how much commercial real estate debt is maturing in 2026. Not over the next 5 years, this year. That's almost 19% more than in 2025, and it's the largest single-year refinancing wave in the history of American real estate. And at the same time, office vacancy just hit 18.2% nationally, the highest level that we've seen in decades. CMBS distress rates climbed to almost 11%, and an estimated 250 million square feet of office space is projected to be demolished or permanently removed from the market completely. But here's what nobody's telling you. While one part of the market is in genuine crisis, another part is experiencing the strongest fundamentals in a decade. Retail vacancy is under 4.5%, the tightest in over 20 years. Industrial demand just posted its strongest 6 months since 2023. CBRE forecasts investment activity to hit $562 billion this year, nearly matching pre-pandemic levels. And CMBS issuance is on track to hit a post-2008 record. So this isn't a market that's crashing or booming. It's a market that's literally splitting in two. And here's what I need you to understand before we go any further. In my career, I have never seen a better setup for investors who know what they're doing, not since 2008, because in volatility, in fear, and in distress lies the greatest opportunities. And this isn't cliché. This is exactly how the biggest fortunes in real estate have been built. And the window is open right now. I'm Hannah Hammond. I'm the CEO of HB Capital, a national real estate capital advisory firm. and we originate debt and equity for commercial real estate every single day. And I'm going to walk you through the entire market, every major asset class, the capital markets environment, and where the real opportunities are right now. So before we get into the individual asset classes, you have to understand what's happening in the capital markets, because capital is the bloodstream of commercial real estate. Every single acquisition, every refinance, every development, it all flows through the capital markets. And right now, the picture is pretty complicated. So let's start with interest rates. The Fed has been holding steady after cutting 75 basis points across late '24 and into '25. Markets are pricing in maybe one more 25 basis point cut in the back half of 2026. But here's the critical nuance that most people miss. The Fed controls short-term rates. Most commercial real estate is priced off of the 10-year Treasury. And the 10-year has been stubbornly range-bound between 4% and 4.25% since mid-2025. So even though the Fed has been cutting, long-term borrowing costs really haven't moved that much. And that matters enormously for the maturity wall because we talked about that $936 billion number. Loans that were originated at 3% to 4% are now refinancing at 6% or 7%. S&P Global reports that the average interest rate on new CRE loans is 6.24%, almost 150 basis points higher than the debt that's coming off the books. So for a $50 million loan, that spread adds roughly $750,000 a year in debt service. And the good news is that lenders are back. After pulling away in 2022 and 2023, capital is flowing again. CBRA forecasts that private label CMBS issuance will hit $183 billion in 2026, a post-financial crisis record and an 18% jump from 2025. Fannie Mae and Freddie Mac each got a 20% increase in their 2026 lending caps to $88 billion each. CMBS spreads are historically tight, around 75 to 82 basis points. And private credit continues to expand its footprint as banks scale back. So the bottom line on capital markets is debt is available, liquidity is improving, and transaction volume is accelerating. But the cost of capital is structurally higher than it was 2 years ago, and that's creating winners and losers across every single asset class. And here's the part that I want you to hear. This dislocation, the gap between where assets are priced today and where they're going to be priced in, say, 3 to 5 years, this is the opportunity. In 2008 and 2009, everyone was terrified. Credit froze, prices collapsed, and the investors who had the courage, the capital, and the knowledge to buy during that fear created generational wealth over the next decade. We are looking at a very similar setup right now. Not because the entire market is collapsing, because it's not, but because distress is forcing good assets into the hands of new owners at reset pricing. Owners who overleveraged in 2021 and 2022 are now handing back the keys on assets that have nothing wrong with them at all except the capital structure. The building didn't break, the loan broke, and that creates the best buying opportunity that we have seen since the Great Financial Crisis. So let me show you exactly where these opportunities are showing up asset class by asset class. Okay, so multifamily. This is the most single most important asset class in commercial real estate. It represents the largest share of investment volume, the most lending activity, and the most investor interest. So let's talk about what's actually happening. The big story is the supply wave. In 2024, developers delivered over 600,000 apartment units, the most in 38 years. 2025 saw roughly 500,000 more. That is an enormous amount of new inventory hitting the market, and it's pushed the national vacancy rate up to around 7 to 8%, depending on which data we're looking at. Apartment List has it at 7.3%. CoStar has it at nearly 8.5% in some markets. And rent growth has been essentially flat. National rents are hovering near zero year over year. And in some Sunbelt markets like where I live in Phoenix or in Austin, Dallas, Nashville, Orlando, they're actually seeing rents decline as they digest this massive amounts of new supply. Austin is down over 6%. But here's the setup. The supply wave is ending. Multifamily construction starts have dropped over 50% from their 2023 peak. The pipeline is contracting rapidly. Completions are expected to fall meaningfully through 2026 and 2027. And Marcus Milchapp projects that national apartment vacancy has peaked and will gradually decline throughout the year. And the demand side is still strong. The monthly payment on a median-priced home is roughly $1,200 more than the average apartment rent. Lease renewal rates are near 50%, well above historical averages. The homeownership barriers are keeping millions of people in the rental markets who would otherwise be buying. The ULI Emerging Trends Report said rental housing's investment outlook is head and shoulders above its peers. So where it gets interesting in the market is the Midwest and the Northeast are outperforming. Chicago, Philadelphia, New York, San Francisco—markets that were never overbuilt are posting the strongest rent growth. Meanwhile, the Sunbelt markets like my hometown of Phoenix, Dallas, and Austin are still 200 basis points above the national average on vacancy and will not fully recover until late 2027. So the plan in multifamily right now is don't chase Sunbelt value-add with aggressive rent growth assumptions. Look for supply-constrained markets with stable employment bases. Class B and C workforce housing is outperforming luxury. And with the GSE lending caps up 20%, the debt is there. Distress-related apartment sales have climbed from $1.1 billion in early 2020 to $13.8 billion by mid-2025. And that number is still rising as the maturity wall forces overleveraged sponsors to sell. And those forced sellers are creating the entry points that patient and well-capitalized investors haven't seen since 2010 and 2011. Okay, so moving on to industrial. This was the darling of the pandemic era. E-commerce exploded, supply chains went to overdrive, and industrial vacancy dropped below 4% nationally. Then came the correction. Developers built aggressively— over 2.7 billion square feet delivered since 2020— and the market is now still digesting that supply. Vacancy has risen to about 7.5% nationally, and CoStar reports over 1.5 billion square feet of available industrial space, which is a record high. Rent growth has decelerated to about 1.5% year over year. And when you factor in concessions and inflation, it's really essentially flat. But the inflection is happening right now. Cushman Wakefield reports that industrial vacancy held flat at 7.1% for 2 consecutive quarters at the end of 2025. And this is the first time vacancy stopped rising in this cycle. Net absorption hit 54.5 million square feet in Q4 alone, up 29% from the year before. Prologis is forecasting 200 million square feet of net absorption in 2026 while deliveries moderate to about 180 million. This means demand is about to exceed supply for the first time in 2 years. So the key theme is bifurcation. Smaller industrial assets under 300,000 square feet have vacancy at just 4.8%, but big box logistics over 300,000 square feet have peaked at about 10.6% before now starting to come down. Modern automation-ready facilities with high power capacity are outperforming everything else. 40% of space under construction is now built to suit rather than spec. Deliveries are down 35% from 2024, and construction is down 63% from 2022 peak. The pipeline is being starved of new supply by higher construction costs, building materials being up over 40% since 2020, as well as tighter financing. That sets up a tightening cycle through 2027 and 2028. Now industrial isn't the rocket ship it was in 2021, but it is stabilizing now. The supply correction is working and the structural drivers like e-commerce at 16% of retail sales and growing resharing, third-party logistics expansion— these are all intact. And I'm telling clients this is a smart entry point for patient capital. Okay, office, the asset class everyone loves to hate on. And look, the headline numbers still are pretty ugly. National vacancy is around 18%. CMBS office distress is at 17.4%. Prices in some markets are down over 50% from their peak. McKinsey projects office demand will stay below pre-pandemic levels through 2030. But underneath those headlines, something really interesting is happening. Colliers reports that net absorption has been positive for 6 consecutive quarters. Vacancy has actually peaked and has started declining. The office construction pipeline hit a 25-year low, and 70% of corporate real estate leaders say their 2026 strategies actually includes adding office space, which is up 56% from 2024. So the market is split into two completely different asset classes when it comes to office. We have trophy and Class A office that's on fire, and in Manhattan, leasing has hit almost 40 million square feet in 2025, which is the highest we've seen since 2019. Net absorption in Midtown hit nearly 8 million square feet, which is the best we've seen in 30 years. Trophy occupancy in top markets exceeds 95%. Rents at the best buildings are hitting all-time highs. AI companies are driving major leasing in markets like Boston, San Francisco, and New York. But when we talk Class B and C office, this is a completely different story. Vacancy on older buildings is over 17% and still climbing. These buildings can't compete on amenities, technology, or energy efficiency. Industry analysts estimate that over 250 million square feet of office will be demolished or permanently removed from inventory. Some people are calling these buildings zombies. Lenders would rather just let them go dark than try to manage and lease them up. So the play in office is if you can acquire a well-located modern building at today's reset pricing, which in some markets is 50 cents on the dollar, and you have the capital to operate it and lease it up, then the returns can be extraordinary because your cost basis is so low. This is literally the kind of opportunity that comes once in a generation. And I was actually just at the MBA conference in San Diego, and some of the panelists for the 2026 outlook— every single one of the panelists said that the number one asset class that they're betting on to become rich in 2026 is office in San Francisco. So people bought trophy office buildings in Manhattan in 2009 and 2010 at prices that looked insane at the time. Just like we're seeing today. They ended up being the best real estate investments of the decade. And I'm not saying every deal works. The wrong office building right now isn't just a bad investment, it's potentially worth nothing. But that's exactly the point. The spread between the best and the worst outcomes is wider than any other asset class in commercial real estate. And that spread is where the outsized returns live for investors who can underwrite the difference. So moving on to retail, here's the asset class that nobody expected to be a winner in 2026. For the last decade, all anyone talked about was the retail apocalypse. Amazon was going to kill every store. Malls were dead. And some of that did happen. Regional malls did take a beating. But what's happened since is a truly remarkable turnaround for the right kind of retail. National retail vacancy is under 4.5%. CoStar has it at 4.3%, heading toward 4.4%. And those are some of the tightest vacancy numbers in over 20 years. New retail construction is expected to fall 37% in 2026. And JPMorgan says they've seen the strongest valuations in over a decade across active shopping centers, excluding regional malls. So what's driving it? Well, grocery-anchored retail is a machine. In Dallas-Fort Worth alone, 80% of new retail space built in 2025 was occupied by grocers. 52 new grocery stores are projected across DFW over 3 years. Necessity-based, experiential, and service retail— these are your, uh, restaurants, your fitness centers, your medical, beauty, pet services. All of these are expanding, and these tenants all need physical locations. You can't get a haircut on Amazon, at least not yet. So retailers are getting smarter about their footprints. The average retail lease signed over the past year fell below 3,500 square feet for the first time since CoStar started tracking. So smaller, more efficient spaces. And retailers are now leasing ground floor space in multifamily buildings, student housing, even office buildings. Nearly 26 million square feet of non-traditional retail was leased through the first 3 quarters of 2025. And retail is a contrarian play with real fundamentals behind it. Limited new supply, high barrier to entry, strong tenant demand, and defensive cash flow. Grocery-anchored and neighborhood centers in high demographic areas are among the most attractive risk-adjusted returns in CRE right now. All right, I can't do a 2026 state of the market without talking about data centers. This sector is in a league of its own. Demand from AI workloads is off the charts. CBRE says 2026 leasing activity is expected to hit an all-time high. In 9 major global markets, 100% of the new construction pipeline is already fully pre-leased. Deloitte called data centers a clear bright spot in the US commercial real estate landscape. The constraint isn't demand though, it's power. Delivery timelines for grid capacity are stretching out for years, which is creating a premium for power-advantaged sites. And Prologis is allocating 40% of its 2026 development starts to data centers, which is up from nearly zero just a few years ago. That tells you everything about where the biggest logistics in the world sees growth. But I do want to give a word of caution here. Not everyone is bullish. In fact, at that MBA conference that I was at, all those panelists said that they're most bullish on San Francisco office, were concerned about data centers and the overbuilding and all of the massive amount of money that's flowing into data centers. So some investors are warning about potential overbuilding and the risk of the NAI spending pullback. Oaks Tree Howard Marks has flagged the possibility of an eventual data center glut, and community pushback on data centers and development is real. Some projects have already been abandoned due to zoning and local politics. So this is a really high-growth sector with real legitimate risks. Size your exposure accordingly. Now, a few other specialty sectors that are definitely worth watching: senior housing. I love senior housing, and it is definitely benefiting from demographic tailwinds. And very little new supply. 10,000 people turn 65 every single day, and we do not have enough supply to house all of the senior citizens in the United States. Medical office remains stable as well, with construction completions expected to drop sharply in 2026. Self-storage is holding steady, and single-family rental continues to perform as homeownership affordability still stays out of reach, unfortunately for many millions of Americans. So let me bring this all together because I don't want you to walk away from this video thinking that the sky is falling. I want you to walk away understanding that what's happening right now is the best setup for commercial real estate investors since the 2008 financial crisis. And I don't say that lightly. And let me explain why. In 2008, fear was everywhere. Credit markets froze, property values collapsed, nobody wanted to touch real estate, and And the people who stepped in during that fear, who had the courage, the capital, and the knowledge to buy when everyone else was running, they built empires over the next 10 years. Every major real estate fortune that was created in the last cycle traces back to someone who bought between 2009 and 2012 when the world thought real estate was dead. We are in a remarkably similar moment. Nearly a trillion dollars of debt is forcing assets to trade. Owners who bought at the peak and overleveraged are handing back properties that have super strong fundamentals but broken capital structures. Prices in entire sectors have reset 30, 40, or 50% from the peak. And most investors are sitting on the sidelines paralyzed by fear and headlines, waiting for conditions to be perfect before they make a move. But here's what I've learned in this business: conditions are never perfect. The perfect time to invest is always obvious in hindsight and is always terrifying in real time. The people who built the most wealth in the last cycle didn't buy when it felt safe. They bought when it felt scary. And right now, it feels scary to a lot of people, and that's exactly why the opportunity is here. So So here's what I'm telling my clients at HB Capital right now. First, this market rewards precision and punishes laziness. The days of buying anything, financing it cheap, and watching it appreciate are over. You have to know the asset class. You have to know the submarket. You have to know the capital stack. Broad bets do not work in 2026. Targeted, well-underwritten bets do. Second, the maturity wall is your best friend if you're a buyer. When nearly $1 trillion in loans needs to be refinanced at higher rates, some owners are going to have to sell, not because the asset is bad, but because the capital structure is broke. That is the definition of distressed opportunity. Good real estate, wrong balance sheet, and you can acquire it at a basis that would have been completely unthinkable years ago. Third, capital structure is everything. How you finance a deal in 2026 matters as much as the deal itself. The right debt, the right terms, the right capital partners. That's the difference between a deal that creates generational wealth and a deal that destroys you. And that's exactly what we do at HP Capital. We help borrowers find the best capital solution for their asset. We help investors access the best opportunities with the right financing in place. And if you're looking at this market and you see what I see, that the fear is creating a once-in-a-cycle buying window We'd love to be your capital partner. The link's in the description. So fourth, CBRE forecasts cap rates to compress 5 to 15 basis points across most property types this year. This means the best buying window might be right now before pricing fully adjusts. The highest returns of this cycle will likely be realized over the next several quarters, not next year, now. And fifth, remember this: wealth doesn't disappear during downturns. It transfers from the overleveraged to the well-capitalized, from the uninformed to the informed, from those who freeze in fear to those who move with conviction. And that's what 2026 is teaching us again. Every single person who built a real estate empire will tell you the same thing. The foundation was poured during a time when everyone else thought the world was ending. This is that time. Please subscribe to this channel. We go deep on commercial real estate, capital markets, and wealth building every single week. Thanks so much for watching.