Crexi National Commercial Real Estate Report: February 2026

Key Takeaways

• Retail maintained strong year-over-year performance with prices up 19.91% despite a 5.29% monthly correction, while vacancy remained historically tight at 5.20% as limited supply continues to support premium valuations.
• Office delivered the most dramatic vacancy improvement of any sector, plunging 200 basis points month-over-month to 18.60% and 710 basis points year-over-year, signaling accelerating recovery momentum as return-to-office trends gain traction.
• Industrial showed stabilization with modest price growth of 0.80% year-over-year and vacancy at 18.60%, reflecting the sector's transition to equilibrium as construction pipelines moderate and demand from third-party logistics providers strengthens.
• Multifamily experienced notable divergence with sale prices up 13.43% year-over-year but vacancy rising 150 basis points month-over-month to 18.30%, highlighting ongoing absorption challenges in markets still working through elevated supply.

Retail Market Analysis

For Sale

Pricing: Retail sale prices on Crexi declined 5.29% in February 2026 to $252.87 per square foot from January's $266.99, marking a notable monthly correction after January's strong performance. Despite this adjustment, year-over-year growth remained robust at 19.91% from February 2025's $202.52, demonstrating sustained investor confidence in retail fundamentals. 

Asking prices moved in the opposite direction, climbing 5.99% month-over-month to $318.19 from $300.20, while posting 20.57% year-over-year gains, suggesting sellers anticipate continued strength despite near-term price volatility.

Cap Rates: Sale cap rates held nearly flat at 6.64% in February, down just 1 basis point from January's 6.65% and compressing 5 basis points year-over-year from 6.69%. 

Asking cap rates remained unchanged at 6.42%, matching January's level while tightening 17 basis points compared to February 2025. This year-over-year compression reflects improving retail fundamentals and strong investor appetite for necessity-based shopping centers.

Vacancy: Retail vacancy on Crexi continued to improve, declining to 5.20% in February from 5.40% in January, a 20-basis-point monthly improvement. The year-over-year trajectory remains compelling, with vacancy falling 210 basis points from February 2025's 7.30%. This sustained tightening across consecutive months reinforces that retail is experiencing genuine supply constraints rather than seasonal fluctuations.

For Lease

Asking vs. Effective Lease Rates: Asking lease rates held steady at $19.30 per square foot in January, matching December's level but marking a 2.90% increase from the prior year's $18.74. More notably, effective lease rates jumped 11.14% year over year to $21.72 per square foot, despite a 3.64% monthly decline from December's $22.54. The widening gap between effective and asking rates suggests landlords are successfully commanding premiums in tight markets while maintaining competitive base rents.

The Big Picture

The retail sector continues to benefit from what JPMorgan Chase describes as "good tailwinds with limited new supply," with active shopping centers achieving their strongest valuations in a decade outside of regional malls. 

Newmark Research emphasizes that the spending power of coming-of-age consumers will help retail navigate economic obstacles in 2026, supporting continued performance in well-positioned properties. The sector's resilience is particularly evident in neighborhood and community centers, where essential retail and services continue to drive consistent foot traffic and sales.

CBRE's 2026 outlook anticipates commercial real estate investment activity increasing by 16% in 2026 to $562 billion, with retail positioned to capture a significant share of this capital deployment. February's monthly price correction appears to be a natural recalibration after January's 25.84% year-over-year spike, rather than a fundamental shift in market dynamics. 

The sector continues to benefit from structural advantages including years of underbuilding, robust consumer spending, and the integration of e-commerce fulfillment into physical retail spaces. With vacancy at historically low levels and rent growth accelerating, retail is demonstrating the type of stable, income-generating characteristics that attract institutional capital in an uncertain economic environment.

Investment Implications: The 5.29% monthly price decline represents a healthy correction after January's surge, creating tactical opportunities for investors to acquire quality retail assets at more attractive entry points while year-over-year fundamentals remain strong. 

Vacancy below 5.50% for two consecutive months confirms that retail has entered a sustained landlord-favorable environment, particularly in grocery-anchored and necessity-based centers where tenant demand continues to exceed available space. Cap rate stability at 6.64% combined with improving asking rents positions well-located retail properties for both income generation and appreciation potential throughout 2026.

Office Market Analysis

For Sale

Pricing: Office sale prices on Crexi declined 5.62% in February to $155.21 per square foot from January's $164.46, marking the largest monthly decrease of any sector. Year-over-year performance also turned negative, down 2.06% from February 2025's $158.41, suggesting continued price discovery in the office sector. Asking prices showed contrasting strength, rising 3.31% month-over-month to $243.13 from $235.33 and posting robust 9.66% year-over-year gains, indicating a widening gap between seller expectations and realized transaction prices.

Cap Rates: Sale cap rates compressed 2 basis points to 7.13% in February from January's 7.15%, though they widened 16 basis points year-over-year from 6.97%. Asking cap rates tightened 3 basis points month-over-month to 7.19% and compressed 6 basis points year-over-year, reflecting improving sentiment among sellers even as completed transactions show continued caution from buyers navigating quality differentiation.

Vacancy: Office vacancy on Crexi delivered the month's most dramatic improvement, plummeting 200 basis points to 18.60% in February from 20.60% in January. Year-over-year performance is even more striking, with vacancy falling 710 basis points from February 2025's 25.70%. This represents the largest year-over-year vacancy compression of any asset class and signals accelerating office market recovery as return-to-office mandates take effect.

For Lease

Asking vs. Effective Lease Rates: Asking lease rates declined 0.35% in February to $14.15 per square foot from $14.20 in January, while posting 0.71% year-over-year growth from $14.05. Effective lease rates rose 0.91% month-over-month to $13.32 from $13.20 and climbed 2.25% year-over-year from $13.02. 

The convergence between asking and effective rates, combined with effective rates approaching asking rates, suggests landlords are reducing concession packages as occupancy improves.

The Big Picture

Cushman & Wakefield characterizes office's shift as "from resilience to optimism" in 2026, with capital flowing again and leasing fundamentals stabilizing or improving across most markets. The 200-basis-point monthly vacancy improvement represents the type of momentum that typically marks the beginning of sustained recovery cycles, particularly when combined with construction starts at 25-year lows and limited new supply entering the market.

JLL's February 2026 Global Perspectives reports that global office leasing rose to its highest level since the pandemic in 2025, with volumes increasing 5% to surpass 2019 levels, creating positive momentum entering 2026. The report notes that gateway markets and larger deals are driving activity in North America, with the global vacancy rate declining after peaking in mid-2025. CBRE projects that performance will vary greatly between newer prime space and older secondary assets, with even more scarcity of available prime space expected by year-end 2026. 

This quality differentiation is evident in Crexi's data, where asking prices continue to rise even as sale prices decline, suggesting that Class A properties are commanding premiums while commodity space faces pricing pressure. With return-to-office mandates accelerating and office usage rising in several markets, the sector appears positioned for continued vacancy compression throughout 2026, particularly in buildings that offer the amenities and flexibility today's tenants demand.

Investment Implications: The dramatic 710-basis-point year-over-year vacancy improvement to 18.60% confirms that office has reached an inflection point, making February an opportune moment for experienced investors to acquire stabilized Class A assets in strong markets before pricing fully reflects improving fundamentals. 

The divergence between declining sale prices and rising asking prices creates a negotiation window for buyers with conviction, particularly in markets where vacancy is dropping below 18% and tenant demand is concentrating in quality buildings. However, investors should remain selective, as the widening cap rate spread year-over-year indicates continued bifurcation between trophy assets commanding premiums and secondary properties facing structural challenges.

Industrial Market Analysis

For Sale

Pricing: Industrial sale prices on Crexi rose modestly in February, climbing 0.66% to $105.26 per square foot from January's $104.57, marking the second consecutive month of gains. 

Year-over-year growth remained minimal at 0.80% from February 2025's $104.42, reflecting price stabilization after pandemic-era peaks. Asking prices demonstrated stronger momentum, rising 0.78% month-over-month to $122.77 from $121.82 and posting solid 7.66% year-over-year growth, suggesting sellers anticipate improving market conditions ahead.

Cap Rates: Sale cap rates expanded 7 basis points to 7.28% in February from January's 7.21%, widening 13 basis points year-over-year from 7.15%. Asking cap rates rose 2 basis points month-over-month to 7.14% and tightened 3 basis points year-over-year, indicating mixed signals as buyers demand higher yields while sellers maintain pricing discipline.

Vacancy: Industrial vacancy on Crexi rose slightly to 18.60% in February from 18.40% in January, a 20-basis-point monthly increase. However, year-over-year performance remains impressive, with vacancy down 450 basis points from February 2025's 23.10%. This represents the continuation of a multi-month tightening trend, though the pace of improvement has moderated from January's dramatic 720-basis-point year-over-year compression.

For Lease

Asking vs. Effective Lease Rates: Asking lease rates held flat at $13.21 per square foot in February, matching January's level and posting minimal 0.08% year-over-year growth from $13.20. Effective lease rates declined slightly by 0.08% month-over-month to $13.10 from $13.11 but demonstrated strong 3.82% year-over-year growth from $12.60. The narrowing spread between asking and effective rates continues to signal reduced concession activity as supply and demand move toward balance.

The Big Picture

The industrial sector is returning to balance between supply and demand levels, with the market transitioning from the supply-driven softness of 2024-2025 to a more equilibrated environment. February's modest vacancy increase of 20 basis points month-over-month represents a healthy stabilization after the dramatic improvements seen in late 2025 and early 2026, rather than a concerning reversal of trajectory.

Cushman & Wakefield's analysis emphasizes that the U.S. commercial real estate sector is entering 2026 with renewed momentum and growing optimism, with industrial positioned as a key beneficiary of this recovery. The sector continues to benefit from structural tailwinds including e-commerce growth, nearshoring initiatives, and the need for modern, efficient distribution networks. JPMorgan Chase notes that industrial remains closely tied to retail's success, with strong consumer spending providing a solid foundation for warehouse demand.

CBRE forecasts that commercial real estate investment activity will increase 16% in 2026 to $562 billion, with industrial expected to capture significant capital allocation given its stable fundamentals and income-generating characteristics. The 7.66% year-over-year growth in asking prices suggests that sellers are increasingly confident about the sector's trajectory, even as sale price growth remains modest. 

With effective lease rates up 3.82% year-over-year and vacancy down 450 basis points, the fundamentals support continued rent growth and occupancy gains throughout 2026. The sector's ability to maintain near-flat asking rents while improving effective rents demonstrates pricing discipline and suggests that concession packages are declining as markets tighten.

Investment Implications: The 450-basis-point year-over-year vacancy improvement combined with stabilizing prices at $105.26 per square foot positions industrial as a compelling value proposition for investors seeking stable cash flow with modest appreciation potential. The modest 20-basis-point monthly vacancy increase represents a natural pause after January's dramatic improvement rather than a reversal of fundamentals, particularly given construction pipelines remain 60% below peak levels and third-party logistics demand continues to accelerate. 

Investors should focus on modern, well-located facilities near major distribution hubs where effective rent growth of 3.82% year-over-year demonstrates genuine pricing power and tenant demand.

Multifamily Market Analysis

For Sale

Pricing: Multifamily sale prices on Crexi rose 1.96% in February to $209.97 per square foot from January's $205.94, marking the second consecutive month of gains. Year-over-year performance remained strong at 13.43% growth from February 2025's $181.77, continuing to outpace most other asset classes. Asking prices remained essentially flat, declining 0.07% month-over-month to $164.01 from $164.12, while posting modest 1.35% year-over-year growth, suggesting that realized transaction prices are exceeding listing expectations.

Cap Rates: Sale cap rates widened 8 basis points to 6.53% in February from January's 6.45%, expanding 24 basis points year-over-year from 6.29%. Asking cap rates tightened 1 basis point month-over-month to 7.27% while widening 17 basis points year-over-year from 7.10%. The expanding cap rates reflect investors demanding higher yields to compensate for near-term vacancy pressures, even as pricing continues to appreciate.

Vacancy: Multifamily vacancy on Crexi rose 150 basis points to 18.30% in February from 16.80% in January, representing the largest monthly increase of any sector. Year-over-year performance also deteriorated significantly, with vacancy up 560 basis points from February 2025's 12.70%. This represents a notable reversal from the 120-basis-point month-over-month improvement seen in January, highlighting ongoing challenges in absorption.

The Big Picture

"Multifamily has always been an entry level asset class for investors starting in CRE. After several years of record low cap rates, a rising interest rate market along with slower rental growth, plus overall inflationary pressure on the economy has seen the shine come off multifamily in the past few years.

There is hope as interest rates start to tick down, but there could still be some waves of uncertainty as loans mature over the next few years and reset the market overall. The most recent jobs report and growing unemployment also hint at a potential slowdown in rental demand, and may postpone any further interest rate cuts." - Adam Siegel, VP Product Growth, Crexi

National Apartment Association characterizes multifamily’s 2026 as a year of transition, with the market still absorbing the final wave of pandemic-era construction starts while positioning for recovery in the second half of 2026. February's 150-basis-point monthly vacancy increase to 18.30% underscores that elevated completions continue to pressure occupancy, particularly in markets that saw aggressive development pipelines during 2022-2023.

NAR's February 2026 analysis notes that the multifamily sector is positioned for modest growth, with supply beginning to moderate and demand stabilizing as economic conditions improve. The report emphasizes that while current vacancy levels remain elevated, the trajectory is expected to improve throughout 2026 as construction deliveries decline and absorption strengthens. CBRE projects that as the construction pipeline shrinks, strong renter demand will lower vacancy rates and precipitate above-average rent growth, particularly in markets where supply has been more constrained.

The sector benefits from powerful demographic tailwinds, including the 25-to-34-year-old age cohort continuing to grow and representing the core renter demographic. Additionally, with homeownership remaining financially out of reach for many households due to elevated mortgage rates and home prices, rental demand maintains a solid foundation. The 13.43% year-over-year price growth demonstrates that investors remain confident in multifamily's long-term value proposition, even as near-term fundamentals work through supply-demand imbalances. 

Deloitte's 2026 outlook adds that multifamily remains strong entering 2026, supported by structural trends such as low supply in many property types bolstering real estate fundamentals. As February's data shows, while vacancy pressures persist in the near term, the combination of moderating construction pipelines, stable rent growth, and strong investor demand positions the sector for improved performance in the latter half of 2026.

Investment Implications: The 560-basis-point year-over-year vacancy increase to 18.30% signals that multifamily markets, particularly in the Sun Belt, are still working through elevated supply from the 2023-2024 construction boom, creating opportunities for patient investors to acquire assets at attractive yields before rent growth accelerates in late 2026. 

Sale price growth of 13.43% year-over-year demonstrates continued investor conviction in the sector's long-term fundamentals, supported by structural advantages including mortgage payments 35% higher than apartment rents keeping would-be buyers in rental housing. Investors should focus on Class B properties in Midwest and Northeast markets where supply has been limited and rent growth is projected at 4-5% annually, while approaching Sun Belt markets selectively as absorption rates lag new deliveries.

Regional Breakdown: Median Cap Rates & Changes MoM by Top MSAs – February 2026

Disclaimer: This article's information is based on Crexi's internal marketplace data and additional external sources. While asking price in many ways reflects market conditions, variations in pricing are affected by changes in inventory, asset size, etc. Nothing contained on this website is intended to be construed as investing advice. Any reference to an investment's past or potential performance should not be construed as a recommendation or guarantee towards a specific outcome.

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