Archives for February 2026

Commercial real estate prices moved in different directions in January, with smaller properties posting gains as investment-grade assets extended their slide.

This divergence, according to CoStar’s Commercial Repeat-Sale Indices, reveals a market dynamic playing out across the U.S. property landscape: Lower-priced assets that populate secondary and tertiary markets are outperforming high-value, big-city properties that dominate headlines and institutional portfolios.

The trend is highlighted in the monthly indices that track when previously sold properties trade again in a process called a repeat sale. CoStar follows secondary-market deals in an equal-weighted index, while premier, more expensive assets show up in a value-weighted index.

“The January report marks the fourth consecutive month that CoStar’s equal-weighted and value-weighted composite indices moved in diverging directions,” said Chad Littell, national director of U.S. capital markets analytics for CoStar and the report’s author.

Financial markets are generally anticipating between one and three Federal Reserve interest rate cuts in 2026. That expectation has increased the optimism that more developers and investors will come off the sidelines and boost deal activity.

“Professional investors have been in a wait-and-watch stance, and we are now seeing a combination of inflection points such as a floor in pricing,” Littell said.

Trailing 12-month sales for all U.S. commercial property deals were up 20% in January on an annual basis to $146.8 billion, Littell said.

CoStar’s equal-weighted index rose 1.3% in January from the prior month. It gained 1.1% annually. The value-weighted index reflecting prices of premier properties fell 0.4% in January and is up just 0.8% year over year — less than half the annual gain reported by the equal-weighted index.

“I think January was the recent anomaly and we’ll see value-weighted return to recent outperformance again in the first half of this year,” Littell said.

The value-weighted measure now stands 17% below its all-time high set in July 2022.

CCRSI tracks various liquidity measures monthly including the number of transactions, the level of distressed sales, time on market and price-to-asking ratios.

January recorded 1,298 repeat sales, generating $9.2 billion — a 10.4% decline from January 2025. Repeat-sale transactions fell by 143 deals compared with the same month a year earlier.

The average time on the market fell to 174 days in the 12 months ended in January, down from 175 days in the same period a year earlier.

However, the modest improvement in time-to-close came with trade-offs.

The price-to-asking ratio declined to 92.5% in January, compared with 93% a year earlier — meaning buyers secured slightly larger discounts off asking prices. The seller withdrawal rate rose slightly to 27.1% from 26%.

Source: “Small town commercial property prices gain as big city real estate declines“

U.S. apartment rents grew in February, with the national average increasing to $1,716 — a +0.1% increase from December’s upwardly revised figure of $1,714. This uptick marks a continuation of positive monthly rent change that began in December 2025, but at a moderated pace. Prior to December, the monthly trend was flat or negative for five consecutive months. Annual rent growth eased marginally to 0.4% in February 2026 from 0.6% in the prior month and down from +1.5% in February 2025.

Apartment rent growth generally follows a seasonal pattern, accelerating in the spring and slowing in late summer and fall. Rents in February typically build on growth that begins with the December inflection. While rent change in February 2026 was positive, the gain was modest relative to typical February seasonality observed from 2010 to 2025, which averages 0.3%. Although rent declines were more pronounced in late summer and early fall of 2025, the monthly trend has stabilized since November, with February extending positive rent growth at a slower pace than January. Supply pressures remain elevated and continue to temper momentum, resulting in uneven early-year gains that remain below typical February seasonal averages.

Metro-level performance eased across the U.S. in February, with 38 of the top 50 markets posting rent increases, down from 42 of the top 50 markets in January. Month-over-month rent growth leaders were Richmond +0.8%, San Jose +0.6% and Louisville +0.6%.

The steepest monthly declines occurred in Nashville, down -0.2%, followed by Charlotte, Tampa, Houston, Austin, Orlando, Seattle and Orange County, all down -0.1%. These Sun Belt markets face elevated vacancy amid aggressive new supply, putting downward pressure on rents, while the Pacific Coast markets’ employment growth lags the national pace.

San Francisco posted the strongest annual rent growth at +5.7%, followed by Norfolk at +4.1%, San Jose at +3.5% and Chicago at +3.0%. In contrast, Austin recorded a -5.1% decline, while Denver fell -3.4% and Phoenix declined -3.3%, each reflecting oversupply outpacing demand.

These patterns reinforce the broader trends: markets with the highest levels of new construction are seeing the weakest rent performance, while more supply-constrained metros — particularly in the Midwest and select coastal areas — continue to outperform. In select markets, however, falling employment and softening demand may also be contributing to weaker rent growth.

While many markets have moved past peak supply, a substantial, though easing, inventory overhang continues to weigh on rent growth across the country.

Source: “Apartments.com Releases Multifamily Rent Growth Report for February 2026“

While investors wiped billions off CRE stocks last week, with JLL, CBRE, and Newmark all seeing 20%+ stock declines on fears that AI will disrupt traditional brokerage, RealtyAds’ AI platform was powering more than 10,000 leasing campaigns across 125 markets, saving clients an average of $8,000 per month compared to traditional advertising services.

RealtyAds, the first and largest provider of AI services in commercial real estate, believes the industry needs a clearer distinction between speculative fears and practical reality.

“Not all AI is designed to replace people,” said Trevor Marticke, CEO of RealtyAds. “In leasing, the most effective AI is purpose-built to help professionals perform better, not necessarily remove them from the process.”

AI Adoption Is Rising, But the Reality Is Still Early-Stage
Across commercial real estate, AI adoption is accelerating. Owners, operators, and service firms are actively piloting new tools, experimenting with automation, and exploring how data can improve decision-making. Yet much of this is occurring at the individual broker level, with limited examples of scaled, repeatable deployment by large corporations across their entire leasing platforms.

This gap between quick individual adoption versus slower corporate adoption has contributed to uncertainty in commercial real estate, particularly among investors and industry professionals concerned about job displacement, service disruption, and long-term relevance.

“The narrative has moved faster than the corporations,” Marticke added. “We’re seeing early adopters already deploying RealtyAds’ agents to help them transact, but individuals alone are not enough to combat the onslaught of market sentiment that corporations at large are not adopting AI fast enough.”

What’s Driving the Market’s Anxiety
Recent selloffs across CRE-focused public companies reflect fears that AI could reduce demand for labor-intensive services or fundamentally alter how deals are sourced and executed. However, much of this concern is rooted in broad assumptions about AI rather than how it is being deployed in practice within leasing workflows.

Leasing remains relationship-driven, highly localized, and dependent on human judgment, factors that AI alone cannot replicate. The most effective applications of AI today are those that support professionals with better data, sharper targeting, and clearer performance insights that ultimately, improve brokerage revenues across the board.

AI Built to Augment Leasing Performance, Not Replace It
RealtyAds was founded in 2019 as an AI-native platform specifically for commercial real estate leasing. Its AI Agents are designed to enhance human decision-making by helping deal teams identify and target decision makers more accurately, engage more prospects, and connect online engagement through to real leasing outcomes.

Rather than automating away roles, RealtyAds AI focuses on improving performance across the full leasing lifecycle by helping clients find, advance, and close more deals. This outcome-based approach helps teams move faster, allocate resources more effectively, and focus efforts where they are most likely to drive revenue.

Clarity Over Complexity
Many CRE organizations face challenges around fragmented systems, disconnected metrics, and siloed data. RealtyAds works with owners, brokers, and asset managers to unify digital channels, property websites, CRM systems, and leasing data into actionable insights that support real transactions.

“When AI is tied to outcomes, it becomes empowering,” Marticke said. “When it isn’t, it just adds noise.”

Looking Ahead
As AI continues to evolve, RealtyAds remains committed to helping the industry cut through hype and focus on what drives leasing performance. Through ongoing research, education, and practical frameworks, the company aims to give CRE professionals confidence about the role of AI in their work.

Source: “RealtyAds Clarifies AI’s Role in Commercial Real Estate Amid Market Volatility“