Crexi National Commercial Real Estate Report: March 2026

Key Takeaways

• Retail remains the tightest sector in commercial real estate, with vacancy holding at 5.20 percent (down 210 basis points year over year) and cap rates continuing to compress.
• Office is stabilizing rather than recovering uniformly, as vacancy dropped to 16.90 percent (down 860 basis points year over year) and effective lease rates outpaced asking rates by a widening margin.
• Industrial is in normalization mode, with pricing stable and cap rates flattening, though vacancy ticked up 100 basis points month over month as the sector continues absorbing a historically large development pipeline.
• Multifamily shows signs of pricing improvement, with sale cap rates compressing 37 basis points in a single month, the strongest move in this report, even as year-over-year vacancy remains elevated from the historic supply wave.

Retail Market Analysis

For Sale

Pricing

The average sale price for retail properties on Crexi came in at $217.88 per square foot in March 2026, an 11.92 percent decline from $247.38 in February. Despite the monthly pullback, sale pricing remains 8.37 percent above its March 2025 level of $199.65 per square foot, which reinforces that the broader annual trajectory for retail valuations is still moving upward.

Month-to-month volatility in sale prices is common in a sector where individual large transactions can skew the average. The more meaningful signal is the sustained annual gain, which reflects ongoing investor demand for retail assets and limited new supply entering the market.

Asking prices tell a somewhat different story. The average asking price rose to $335.17 per square foot in March, up 5.22 percent from February and a notable 24.38 percent above year-ago levels. This widening gap between asking and closing prices suggests that sellers are pricing aggressively based on the tight conditions that have characterized the sector for several quarters, while buyers remain disciplined in their underwriting.

Cap Rates

Sale cap rates for retail edged down to 6.59 percent in March, a four-basis-point decline from February and 16 basis points below March 2025. Asking cap rates followed a similar pattern, falling to 6.39 percent, a six-basis-point dip month over month and 19 basis points lower on an annual basis.

The consistent downward drift in cap rates over the past 12 months signals growing investor confidence in retail fundamentals and reflects the sector's compression toward tighter pricing. For context, CBRE forecasts that cap rates across most property types will compress an additional five to 15 basis points in 2026, and retail's trajectory on Crexi is tracking ahead of that pace.

Vacancy

Retail vacancy held steady at 5.20 percent in March, unchanged from February and 210 basis points below the 7.30 percent recorded a year ago. This is among the tightest readings across any asset class in our data.

The year-over-year improvement reflects a combination of strong tenant demand and a severely constrained development pipeline that has kept available space scarce. With vacancy well below historical norms, competition for quality retail space continues to benefit landlords through both occupancy stability and rent growth leverage.

For Lease

Asking vs. Effective Lease Rates

Retail asking lease rates ticked up to $19.81 per square foot in March, a modest 0.20 percent increase from February and 2.93 percent higher on an annual basis. Effective lease rates held flat at $20.25 per square foot month over month but are up 1.63 percent year over year.

Effective rates continue to exceed asking rates, which suggests that executed leases are reflecting tenant improvement concessions, shorter-term commitments or higher-quality spaces that command premiums above the posted average. The sustained annual growth in both metrics, even if incremental, reinforces that landlords retain pricing power in a market where available supply remains limited.

The Big Picture

Retail continues to stand out as the most competitive sector, and the Crexi data for March reinforces that view. Vacancy at 5.20% sits well below historical averages, cap rates are compressing on a year-over-year basis, and annual pricing gains remain firmly positive.

Nationally, these conditions are driven by factors that have been building for years: a decade of minimal new retail construction, expanding demand from grocery, discount and services-oriented retailers that depend on physical locations, and healthy consumer spending that continues to support leasing activity. Retail is experiencing its strongest valuations in a decade across active shopping centers (excluding regional malls) and grocery-anchored and neighborhood formats are performing especially well.

That said, the strength of the retail sector is not uniform across all subsegments. Well-located, necessity-based formats with limited new supply continue to outperform, while secondary-quality centers with weaker tenant bases face softer conditions. Retailers are also embracing smaller footprints, with average lease sizes falling below 3,500 square feet nationally for the first time, driven largely by restaurant and quick-service operators.

For investors, risk-adjusted returns look particularly attractive in grocery-anchored centers and open-air formats. Deloitte's 2026 outlook highlights grocery-anchored retail among the asset types best positioned for a lower-growth economic environment. Looking ahead, the combination of limited supply and resilient demand should continue to support tight fundamentals into the second half of 2026.

Investment Implications: Focus on grocery-anchored and open-air neighborhood centers, where limited supply and necessity-driven tenancy provide durable income and downside protection. Cap rate compression on Crexi suggests the window for attractive entry pricing is narrowing, so investors should be prepared to move decisively on well-located assets. The widening gap between asking and sale prices also signals negotiation opportunities for disciplined buyers who can underwrite current fundamentals rather than seller aspirations.

Office Market Analysis

For Sale

Pricing

Office sale prices on Crexi averaged $163.15 per square foot in March, a 2.79% uptick from $158.72 in February. On an annual basis, however, sale prices remain slightly below March 2025 levels, down 0.77% from $164.41 per square foot. This pattern, with modest monthly gains but a slightly negative year-over-year reading, is consistent with a sector that is stabilizing rather than recovering decisively.

Asking prices showed more strength, rising to $253.75 per square foot, up 5.20% month over month and 12.68% higher than a year ago. The gap between asking and sale prices remains wide, reflecting persistent uncertainty in office valuations and the ongoing difficulty buyers and sellers face in reaching alignment on pricing.

Cap Rates

Sale cap rates for office moved up to 7.19% in March, a six-basis-point increase from February and 27 basis points above the year-ago level. Asking cap rates declined slightly to 7.16%, falling four basis points month over month, though they remain 24 basis points higher year over year.

The upward year-over-year trend in sale cap rates reflects the repricing that has taken place across much of the office sector since the rate-hiking cycle began. At 7.19%, sale cap rates remain elevated relative to the other major asset classes covered in this report, which underscores the risk premium investors continue to demand for office exposure.

Vacancy

Office vacancy on Crexi fell to 16.90% in March, a 180-basis-point decline from February's 18.70% and a significant 860-basis-point improvement from 25.50% a year ago. While the year-over-year improvement is notable, office vacancy remains the highest of any sector in this report. Of note, these metrics cover vacancy across listed properties vs. the total market, so the share of properties for sale with higher vacancies may be greater than those of owners keeping their assets that have stronger tenancy.

The sharp monthly decline suggests improving leasing momentum and aligns with broader industry data suggesting that national office vacancy may have peaked in late 2025. Conditions still vary dramatically by building quality, however, with high-quality, well-located assets absorbing demand far more quickly than older commodity product.

For Lease

Asking vs. Effective Lease Rates

Office asking lease rates dipped slightly to $19.13 per square foot in March, down 0.36% from February, though still 0.78% higher than a year ago. Effective lease rates, by contrast, rose to $21.12 per square foot, up 1.20% month over month and 4.55% higher year over year.

The persistent premium of effective rates over asking rates, and the fact that effective rates are growing faster, indicates that higher-quality spaces are commanding premium rents while lower-tier space continues to weigh on asking-rate averages. This bifurcation is a defining feature of the current office market: tenants are paying up for top-tier space, while commodity product is competing on concessions.

“The office sector has undergone a radical reset since 2020, and after a few turbulent years, we're finally seeing where things land. The flight to quality is real: well-located buildings with strong amenities are in high demand, while older, less competitive stock is being repurposed or demolished, especially in markets with strong fundamentals. 

Vacancy rates in many markets are beginning to stabilize and in some cases trend in the right direction. New demand from AI companies, financial services firms, and legal tenants is driving significant leasing activity in markets like San Francisco and New York City. Over the next few years, we expect the office market to continue adjusting toward a healthier, right-sized equilibrium." - Adam Siegel, VP of Product Growth, Crexi

The Big Picture

The March Crexi data reflects an office sector moving past its trough, albeit unevenly. Vacancy has improved on both a monthly and annual basis, effective lease rates are climbing, and sale prices are showing tentative month-over-month gains.

Nationally, these trends are consistent with what the major research houses are reporting. 2025 was the first year of positive full-year net absorption since 2019, with 50 U.S. office markets recording positive absorption, and  demand for high-quality space is growing and spreading geographically. Newmark's year-end data confirmed that sublease availability fell more than 20% year over year and that four- and five-star properties are capturing a disproportionate share of leasing activity.

Even greater scarcity of available prime space is expected by year-end 2026, which would further widen the performance gap between premier and secondary assets.

The bifurcation in this sector remains pronounced, however. The widening spread between effective and asking lease rates on Crexi, along with elevated sale cap rates, illustrates the challenge facing owners of older, less competitive office buildings. Newmark describes the market as entering a period characterized by below-trend growth and stubborn inflation, which limits the pace of recovery even as fundamentals gradually improve.

Deloitte's 2026 outlook found that both suburban and downtown office regained investor interest in their annual survey, but the broader market continues to face structural headwinds from hybrid work and potential AI-driven space efficiencies. The practical takeaway is that modern, well-amenitized office assets in major metros will continue to lead the recovery, while secondary and tertiary office product will require creative repositioning or repricing to attract tenants and capital.

Investment Implications: Concentrate on four- and five-star assets in metros with positive net absorption, where scarcity of prime space is tightening and tenant demand is demonstrably growing. Elevated cap rates on commodity office present apparent yield, but the risk of prolonged vacancy and capital expenditure requirements should be underwritten conservatively. The spread between effective and asking lease rates on Crexi suggests that investors who acquire well-positioned buildings can capture meaningful rent premiums relative to the broader market.

Industrial Market Analysis

For Sale

Pricing

Industrial sale prices averaged $109.82 per square foot in March, up 3.19% from February's $106.42 and 3.46% above March 2025's $106.02. Asking prices held effectively flat month over month at $122.58 per square foot (down 0.07%) but are 7.75% higher than a year ago.

The stability in both asking and sale prices, combined with positive year-over-year gains, points to a sector that is finding a new pricing baseline after the rapid run-up of 2021 through 2023. Investors appear to be underwriting industrial assets with more discipline than during the peak period, but they are also not retreating from the sector.

Cap Rates

Sale cap rates for industrial tightened to 7.17% in March, declining 12 basis points from February's 7.29%. On a year-over-year basis, sale cap rates are up just five basis points from 7.12% in March 2025. Asking cap rates also declined modestly to 7.13%, down four basis points month over month and flat compared to a year ago.

The month-over-month tightening suggests a slight improvement in buyer confidence, and the near-flat annual reading indicates that the repricing phase for industrial assets has largely run its course. Cap rates appear to have stabilized after expanding through 2024 and early 2025.

Vacancy

Industrial vacancy on Crexi rose to 19.70% in March, up 100 basis points from February's 18.70%. On a year-over-year basis, however, vacancy is down 250 basis points from 22.20% in March 2025.

The monthly uptick is a reminder that the industrial sector is still working through the aftereffects of a historically large development pipeline. While the annual improvement is encouraging, the sector's vacancy rate remains elevated relative to the sub-5% levels that prevailed during the pandemic-era surge in logistics demand. Practitioners should expect continued vacancy volatility through mid-2026 as new supply is absorbed.

For Lease

Asking vs. Effective Lease Rates

Industrial asking lease rates held flat at $13.29 per square foot in March, unchanged from February and up 1.05% year over year. Effective lease rates dipped slightly to $13.14 per square foot, down 0.15% month over month, though they remain 1.83% higher than a year ago.

The fact that effective rates are now running slightly below asking rates suggests that landlords are offering modest concessions to attract tenants in a more competitive leasing environment. That said, the year-over-year growth in both metrics indicates that rental rates have not deteriorated and are holding up better than the vacancy data alone might suggest.

The Big Picture

The March Crexi data shows the industrial sector in what most national observers are calling a normalization phase. After a decade of extraordinary performance, the sector is recalibrating toward a new equilibrium in which supply and demand are moving back into balance. Pricing has stabilized, cap rates have flattened  after a period of expansion, and annual rent growth, while positive, is far more modest than the double-digit gains of 2021 and 2022.

Construction starts have dropped sharply, down roughly 63% from 2022 levels, which means the supply pipeline is thinning significantly. Industrial vacancy is expected to peak around mid-2026 before net absorption picks up and begins to tighten conditions in the back half of the year and into 2027.

Within the sector, performance increasingly depends on product type and location. CBRE notes that occupiers are pursuing a flight to quality, favoring modern, well-located, and efficient logistics space while older or too-large assets face higher vacancy and weaker leasing demand. Reshoring and third-party logistics outsourcing are expected to be key demand drivers in 2026.

Industrial remains strong across both urban infill locations and big-box warehouses in high-growth corridors. As the construction pipeline shrinks, the industrial sector's long-term structural advantages remain intact, and the near-term adjustment period favors patient investors who can underwrite current conditions rather than peak-era growth assumptions.

Investment Implications: Prioritize modern logistics assets in infill locations and markets with strong transportation infrastructure, where occupier demand is proving most durable. With cap rates stabilizing and the supply pipeline shrinking, the current window offers an opportunity to acquire well-positioned industrial product before conditions tighten further. Assets with below-market rents and medium-term weighted average lease terms offer a particularly compelling mark-to-market thesis over a five-to-seven-year hold.

Multifamily Market Analysis

For Sale

Pricing

Multifamily sale prices on Crexi averaged $195.34 per square foot in March, down 2.83% from $201.03 in February. On an annual basis, sale pricing is up 4.22% from $187.10 per square foot. Asking prices rose to $167.95, up 2.02% month over month and 4.31% higher than a year ago.

The month-to-month dip in sale prices is not unusual given seasonal patterns and transaction mix, and the positive annual trend in both asking and sale prices suggests that multifamily values are gradually recovering after the repricing of 2023 and 2024. Sale prices remain above asking prices on average, which typically indicates that the assets actually trading are of higher quality than the broader listed inventory.

Cap Rates

Sale cap rates for multifamily compressed to 6.17% in March, declining 37 basis points from February's 6.54% and 25 basis points below the year-ago level of 6.32%. This represents the most significant monthly cap rate movement of any sector in this report.

Asking cap rates also declined, falling to 7.21% from 7.27% in February, though they remain six basis points above year-ago levels. The sharp compression in sale cap rates suggests that executed transactions are reflecting improved investor sentiment and a willingness to accept tighter yields for well-positioned multifamily assets.

The divergence between sale and asking cap rates (6.17% vs. 7.21%) also illustrates that the properties actually closing are commanding stronger pricing than the typical listed asset, a dynamic that Crexi Intelligence users can track across markets.

Vacancy

Multifamily vacancy declined to 17.50% in March, improving 90 basis points from February's 18.40%. On a year-over-year basis, however, vacancy is up 380 basis points from 13.70% in March 2025.

The opposing monthly and annual trends point to a more nuanced multifamily story. While rental conditions appear to be improving on a near-term basis, the sector is still absorbing the effects of the largest wave of new apartment deliveries in roughly 50 years. The month-over-month decline is a constructive signal that absorption is beginning to outpace new supply additions in the near term, even as the year-over-year reading still reflects the cumulative impact of the supply cycle that peaked in 2024 and 2025.

The Big Picture

Year-over-year multifamily vacancy remains elevated because of the historic supply wave, but month-over-month improvements in both vacancy and cap rates suggest the early stages of the normalization that many forecasters have been anticipating.

Barriers to homeownership, including a 105% monthly premium to buy versus rent, an estimated 3.4 million single-family housing shortage, and elevated mortgage rates, should continue to support multifamily demand throughout 2026. Multifamily conditions continue to be shaped by slowing supply and stabilizing vacancy, with rent growth expected to build through the year as the pipeline of new deliveries thins.

Markets Group expects national apartment vacancy to have peaked and to gradually decline throughout 2026, aided by a continuing slowdown in construction starts.

Performance continues to vary significantly by market type. Sun Belt and Mountain markets face a twin challenge of macroeconomic headwinds and the lingering effects of a 50-year-high supply wave, which is pushing the timeline for positive asking rent growth in those markets to late 2026. Operators in high-supply markets are prioritizing occupancy over rent increases, with renewal rates rising to 57% of all leasing activity nationally as landlords work to retain existing tenants rather than turn units in a competitive environment.

The March data, which shows cap rates compressing even as vacancy remains above year-ago levels, may reflect growing investor confidence that the worst of the supply overhang is behind the sector. Demand is running roughly 30% above its 10-year average, supported by high mortgage rates, scarce for-sale inventory and affordability pressures that continue to favor renting. As deliveries slow through the rest of 2026, the supply-demand balance should continue to improve, creating a more constructive backdrop for rent growth and investment activity in the second half of the year.

Investment Implications: Favor markets where the supply wave has largely been absorbed and where renter demand is supported by strong employment and wage growth, particularly in Midwest metros and coastal markets with constrained pipelines. In Sun Belt markets that remain oversupplied, patience is warranted, as fundamentals are unlikely to fully reset until late 2026 or 2027. The 37-basis-point cap rate compression in March signals growing competition for quality multifamily product, so investors seeking value should focus on assets with in-place rents below market where a lease-up or renovation strategy can drive NOI growth.

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