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This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, February 2, 2026. Here’s what we’re covering today:

• Rate and Lending Update – where interest rates stand and how lenders are adapting
• National Market News – the latest trends in commercial real estate and capital markets
• Distress & Recovery – signs of stress and improvement in the U.S. CRE landscape
• Regional Spotlight – a focus on key U.S. markets attracting attention

Rate and Lending Update

The Federal Reserve held its benchmark rate steady at a target range of 3.50%–3.75% in its late-January meeting, marking a pause after several 2025 rate cuts . As a result, the Wall Street Journal Prime Rate remains at 6.75% . Long-term borrowing costs are still elevated – the 10-year U.S. Treasury yield hovers around 4.2% – which has kept commercial mortgage rates from falling further. Currently, well-qualified borrowers are seeing commercial mortgage rates starting in the mid-5% range, with many standard loans landing in the low-6% area . Higher-risk financing, such as bridge loans, comes at a premium (often near 9%) .

On the bright side, financing is generally cheaper today than it was a year ago thanks to those late-2025 Fed rate cuts . Even so, lenders remain cautious. With underwriting still conservative, deals with strong cash flows and moderate leverage are getting done, while marginal deals remain difficult to finance . Notably, some regional banks that pulled back in 2022–2024 are tiptoeing back into CRE lending as rates ease. According to industry reports, regional banks are seeing stabilizing loan portfolios and have modestly increased new origination for high-quality projects . This gradual return of bank lending is a positive sign for investors, though credit standards are still tighter than a few years ago.

Insurance Market Eases

After several turbulent years of rising premiums, the commercial property insurance market is finally showing relief. Expanded insurer capacity and lower catastrophe losses in 2025 have led to increased competition among carriers . Major wholesalers report that many property insurance renewals in 2025 came in 5–10% lower than the previous year, with further rate softening expected in early 2026 . This is the most significant easing of property insurance costs since before the pandemic. Owners of apartments, condos, industrial properties and other assets that saw big insurance spikes are benefiting the most from the newfound price relief . While insurers are still diligent about risk (for example, they continue to scrutinize buildings in hurricane and wildfire zones), the overall easing of premiums and improvement of terms is good news for real estate investors and operators heading into 2026.

National Market News

Investor sentiment is turning optimistic. A new survey shows that 95% of investors plan to buy as much or more commercial real estate in 2026 as they did last year . More than half of investors even expect to increase their allocations to real estate this year, up from 48% in 2025 . The renewed confidence stems from signs of stabilizing property values and an expectation that debt costs will gradually decline . “Stabilizing debt costs and attractive entry pricing are driving investor confidence,” noted one brokerage’s capital markets president, adding that many see 2026 as an opportunity to lock in quality assets at favorable prices .

Investors are refocusing on what they view as safer bets. Multifamily remains the most sought-after sector by a wide margin – about 74% of investors are targeting apartments – followed by industrial/logistics at 37% and retail at 27%. Only 16% of investors are looking to buy office properties , reflecting continued caution in that troubled sector. Most investors also favor moderate risk strategies (value-add and core-plus deals) over highly speculative plays; in fact, interest in opportunistic or distressed strategies has waned compared to a year ago . This suggests that while buyers believe the market is recovering, they are sticking with quality assets and proven markets rather than chasing heavily distressed bargains.

In capital markets news, signs of thawing are emerging. Commercial real estate transaction volumes were subdued through 2025, but late last year saw improvement. Industry data show CRE lending activity in Q3 2025 was up over 100% year-on-year as debt providers adjusted to the new rate environment. Public markets, however, remain quiet – there were virtually no REIT IPOs in recent years , as real estate firms continued to rely on private capital and take-private deals instead of new stock offerings. And in Washington, a change at the Federal Reserve is on the horizon: President Trump’s nominee for the next Fed Chair, former Fed governor Kevin Warsh, is viewed favorably by many in real estate circles . Warsh is seen as a steady hand likely to maintain consistent policy, a factor that industry observers hope will keep interest rates predictable and capital flowing.

Distress & Recovery Watch

Certain segments of the market are still under stress even as others recover. Office properties remain the biggest trouble spot. Office values have fallen sharply from their peak in many cities, and vacancy rates for older, lower-quality buildings remain high. A key indicator: the delinquency rate for office loans in CMBS (commercial mortgage-backed securities) hit 11.8% in late 2025, the highest level of this cycle . Lenders and borrowers are grappling with a wave of loan maturities – many loans from the 2019–2021 era are coming due in 2026 and face much higher refinancing rates. Owners of these properties often find that new loans are smaller than the balances being refinanced, forcing difficult choices. Some borrowers will need to pay down principal or bring in fresh equity to satisfy lenders . Others may seek extensions or restructurings to buy time. There is hope that further Fed rate cuts later in 2026 could ease refinancing pressures , but for now, the so-called “maturity wall” is a major challenge in the office and retail sectors.

Despite the headwinds, there are glimmers of a recovery. Well-capitalized investors are selectively hunting for deals in distressed assets, especially in the office sector’s highest-quality properties. In fact, large institutional investors turned net buyers of office assets in late 2025 for the first time since 2022 , betting that pricing has finally bottomed out for prime buildings. The flight to quality is evident: newer, amenity-rich office towers and life-science conversions are attracting tenant demand and investor interest, even as older offices struggle. In addition, adaptive re-use and conversions of obsolete offices into apartments or other uses are accelerating in several cities (often with public sector support), which over time could reduce the oversupply of vacant office space.

Outside of offices, most commercial real estate fundamentals are gradually improving. Apartments and industrial properties continue to enjoy relatively strong rent collections and occupancy, and retail and hotel performance has been bolstered by the past year’s solid consumer spending. (It’s worth noting, however, that U.S. consumer confidence did fall sharply last month to its lowest level since 2014 – a reminder that the economy isn’t out of the woods, and a cautious consumer could hit retail and hospitality real estate demand moving forward.) On the upside, flexible office use is growing: the co-working sector has expanded to about 158 million square feet of space nationwide, up significantly from pre-pandemic levels , as companies large and small opt for shorter-term, plug-and-play office solutions. This trend is helping absorb some surplus office space and indicates how the workplace is evolving. All told, industry analysts describe the outlook as “choppy” – a mix of encouraging momentum in certain areas and lingering stress in others, making 2026 a year of careful navigation for CRE stakeholders.

Regional Spotlight: Sun Belt Leads, Gateways Revive

In today’s regional spotlight, we examine where investor interest is highest – and how some previously hard-hit markets are showing new life. According to a recent investor intentions survey, Dallas ranks as the most attractive U.S. market for commercial real estate investment for the fifth year in a row . Sun Belt metros continue to dominate wish-lists: Atlanta holds the #2 spot, and other fast-growing cities like Charlotte, Nashville, and Tampa cracked the top ten for investors this year . These markets are benefiting from strong job and population growth, relatively business-friendly climates, and, in many cases, robust in-migration. Investors are flocking to capitalize on demand for housing, logistics, and office space in these high-growth regions. For example, in Texas, industrial real estate is booming – Houston just closed out 2025 with record warehouse absorption driven by big players like Tesla and Pepsi expanding there. It’s a similar story in parts of the Southeast, where multifamily and industrial deals are moving briskly as fundamentals hold strong.

At the same time, there’s a parallel storyline in the traditional gateway cities. While coastal core markets had a rough few years, savvy investors are now eyeing selective opportunities in places like New York and San Francisco. Notably, San Francisco jumped back into the top three investment markets this year , reflecting bargain-hunting for discounted assets in a market that’s seen prices reset. In fact, tech industry growth is helping to revive some office demand on the West Coast: tech leasing activity in 2025 surged by roughly 45% year-over-year in tech-centric hubs like Seattle and San Francisco , as major companies (especially in AI and cloud sectors) took advantage of favorable rents to expand offices. This tech-driven rebound has boosted optimism in those cities that the worst may be over for their office markets, at least for the top-tier properties.

Meanwhile, New York City is seeing its own bifurcated recovery. Manhattan’s newest “trophy” office towers – featuring state-of-the-art design and amenities – are enjoying strong demand. Big-name tenants have been pre-leasing space in high-profile projects years before they open (recent examples include major financial and tech firms securing space in towers slated for 2027) . This early leasing success speaks to confidence in the long-term future of prime NYC offices. In contrast, many older Class B offices in New York (and other gateway cities) face an uphill battle with high vacancies and needed upgrades. In the multifamily arena, New York landlords got a piece of good news: a proposed city law that would have given non-profits first dibs on purchasing apartment buildings (the “Community Opportunity to Purchase Act”) was vetoed and officially shelved last week , relieving owners who had feared additional hurdles to sell properties. All told, the takeaway is that gateway markets are not out for the count – investors are selectively re-entering these markets, drawn by lower prices on quality assets – even as the Sun Belt continues to shine as a growth engine.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, January 30, 2026. Here’s what we’re covering today:

• Rates & Insurance: Interest rates show signs of leveling off, and property insurance costs finally ease.
• Market News: Investors regain confidence as commercial real estate (CRE) stabilizes.
• Distress & Recovery: How much stress remains in CRE loans, and where we’re seeing a rebound.
• Regional Spotlight: A closer look at New York City’s office market comeback.

Mortgage, Lending Rates & Insurance Update

Borrowing costs may be near their peak. The Federal Reserve held its benchmark federal funds rate at 3.5%–3.75% this week , and the 10-year Treasury yield is hovering around the mid-4% range (about 4.24% as of yesterday) . Mortgage rates are trending down as well – the average 30-year fixed home mortgage sits just above 6.1%, down from nearly 7% a year ago . Lenders are cautiously expanding credit again; U.S. banks actually picked up the pace of CRE lending in late 2025, and modest loan growth of ~2.5–3% is forecast for 2026 amid hopes of gradual Fed easing . On the insurance front, there’s some relief for property owners: after six years of painful premium hikes, commercial property insurance rates finally ticked down in late 2025. In fact, global property insurance prices fell by roughly 8% in Q3 2025, and U.S. property insurance saw its first rate drop since 2017 . Lower financing and insurance costs should help deal makers breathe a bit easier going into 2026.

National CRE & Capital Markets News

Nationwide, the commercial real estate outlook is improving. Investors are gearing up to put more money to work in 2026 after a prolonged market slowdown. According to a new survey, 95% of investors plan to buy as much or more CRE this year than they did in 2025, and 55% expect to increase their allocations to the sector . The optimism stems from stabilizing property values and growing confidence that interest rates are at or near their peak . Preferences are still sector-specific: multifamily remains the favorite asset type (targeted by 74% of investors) with industrial/logistics next (37%), while only 16% are looking at office – reflecting continued caution on offices . Geographically, Sun Belt markets remain popular: Dallas ranked as the top target for the 5th year in a row, with Atlanta close behind, even as some gateway cities like San Francisco edge back into favor .

Deal activity is expected to pick up pace as the year progresses. In fact, commercial real estate investment volume is forecast to jump about 16% in 2026 to $562 billion, nearly returning to pre-pandemic levels . Any growth will be driven mainly by income returns and selective deals, since pricing isn’t skyrocketing – if anything, cap rates for most property types may compress slightly (by a few basis points) as markets find their footing . Capital markets are open but selective: well-priced, higher-quality assets are finding financing, while riskier deals still face scrutiny. Notably, commercial mortgage-backed securities (CMBS) issuance rebounded in 2025 and could remain high this year, aided by strong investor demand for solid real estate debt . All of this signals a cautious recovery – there’s more confidence out there, but discipline remains the name of the game.

Distress and Recovery Developments

Now for the flip side: where is the distress, and are things getting better? The pile of troubled CRE loans is still sizable, but it’s not growing unchecked. As of year-end 2025, about 7.3% of CMBS loans were delinquent (e.g. behind on payments), up significantly over the past year . The office sector is the hardest hit – office loan delinquencies spiked to an all-time high around 11% – a stark reminder of ongoing stress in older offices with vacancies. Even multifamily isn’t immune, with apartment loan delinquencies rising to 6.6% in CMBS pools . Many of these distressed loans are a result of maturing debt that owners struggled to refinance in the higher-rate environment. The good news is lenders and borrowers are actively working through the issues: we’re seeing a lot of loan extensions, modifications, and even the occasional “keys handed back” to lenders as ways to resolve bad debt . In other words, the market is sorting itself out rather than seeing a sudden crash – problematic assets are being dealt with case by case.

Meanwhile, underlying property values and fundamentals have started to stabilize, which helps the recovery. After several quarters of price declines, commercial property values leveled off and even inched up late last year , suggesting that buyers and sellers are finding a floor. Rental demand is slowly firming up in many markets (with leasing activity improving from 2024’s lows in most sectors ), and landlords are focusing on keeping quality tenants. Crucially, the anticipated “wave” of 2026 loan maturities is expected to be manageable, more of a steady flow than a tsunami . Banks and investors are prepared to refinance or restructure viable projects, especially for properties with solid income and sponsorship. All told, 2026 is shaping up as a transitional year: the industry is moving from broad turbulence to a more selective recovery, where strong assets can rebound while weaker ones get revalued or repurposed . It’s a tough love scenario, but it’s laying the groundwork for a healthier market ahead.

Regional Spotlight: New York City’s Office Rebound

For our regional news spotlight today, we turn to New York City, where an interesting comeback story is unfolding in the office market. After a deep slump during the pandemic and its aftermath, Manhattan office properties are attracting investors again. In 2025, office investment sales in NYC surged by about 30% year-over-year to total $11 billion, according to JLL data . That jump in volume signals renewed confidence and a noteworthy recovery in New York’s capital markets. A few big deals helped drive the resurgence: for example, RXR Realty’s purchase of 590 Madison Avenue for $1.1 billion and other major transactions like the $510 million sale of the Sotheby’s headquarters were headline-grabbers . Private and institutional capital that had been on the sidelines is now re-engaging in NYC, drawn by sharply discounted prices on some properties and the city’s enduring appeal as a business hub .

At the same time, New York is tackling its office glut in a creative way – by converting older, underused offices into housing. Roughly 34 million square feet of office space in Manhattan is either in the process of conversion to residential use or under serious consideration for it . Lower Manhattan is leading this trend, thanks to more flexible zoning and many aging office buildings that can be adapted into apartments. Notable projects like the huge 25 Water Street conversion (transforming a 1960s office tower into hundreds of apartments) are emblematic of this shift. These conversions serve a dual purpose: they help chip away at high office vacancy rates and add much-needed housing stock. For investors, the takeaway is that New York’s office market is slowly finding a new equilibrium – top-quality buildings are recovering value, and obsolete offices are being reborn in new forms. It’s a gradual comeback, but for the first time in a while, New York real estate is showing signs of forward momentum rather than just distress.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, January 29, 2026. Here’s what we’re covering today:

• Rates and Financing Costs: Where interest rates and lending stand for commercial real estate, including mortgages and insurance.
• Market News: The latest on national CRE and capital markets – from Fed moves to deal volume and forecasts.
• Distress vs. Recovery: Signs of distress as debt comes due, and bright spots like co-working and hotels.
• Regional Spotlight – Dallas: A look at how one major U.S. office market is faring amid these trends.

Rates and Financing Update

Interest Rates: The financing environment is a bit friendlier than a year ago. The Federal Reserve’s benchmark rate currently sits around 3.5%–3.75% after rate cuts late last year . The Fed paused further cuts at its latest meeting, signaling it will hold steady for now . Long-term yields remain elevated – the 10-year Treasury is roughly 4.3% – keeping borrowing costs higher than during the pandemic era. For context, new commercial mortgage loans are averaging interest rates around 6.2%, versus sub-5% rates on loans originated a few years ago . In short, debt is pricier, but at least not getting pricier as fast.

Lending & Mortgage Rates: Banks and lenders are cautious, but there’s liquidity for solid deals. Typical commercial loan rates range from the mid-5% into the high single digits depending on risk . Borrowers with high-quality assets are still securing loans, especially with multifamily agency lenders – in fact, Fannie Mae and Freddie Mac have increased their lending caps by about 20% for 2026 , which should help apartment investors. However, underwriting remains tight, and many deals are re-pricing to reflect today’s rates.

Insurance Costs: Another cost on the rise for property owners is insurance. Commercial property insurance premiums have jumped significantly in recent years – up roughly 75% from 2019 to 2024 on average for apartment buildings . In disaster-prone areas like coastal Florida or California wildfire zones, some investors are seeing sticker shock on insurance renewals. While there are early signs that insurance rate hikes are stabilizing heading into 2026, high premiums continue to squeeze property net incomes and are a key factor investors must underwrite carefully.

National CRE and Capital Markets News

Fed and Economy: All eyes are on the Federal Reserve and economic indicators. With inflation proving a bit sticky, the Fed opted to hold rates steady this week after easing a few times last fall. Investors are now betting that the next Fed rate cut won’t come until mid-year – futures point to a possible June cut if economic conditions allow. Fed Chair Powell’s term ends in May, and markets are watching for President Trump’s nominee to take over the helm . For now, borrowing costs remain elevated, and that has direct effects on real estate activity.

Deal Volume Slump: Higher-for-longer interest rates have put a damper on commercial real estate dealmaking. Sales volumes have slowed – November marked the second straight month of year-over-year declines in transaction activity as many investors stay cautious or wait for better financing terms. Simply put, deals are tougher to pencil out when debt costs 6%–7% instead of 3%–4%. 2019-era low cap rates are giving way to higher cap rates (and lower asset values) to rebalance with the new financing reality. Lenders are also pickier, which has trimmed the number of deals getting done.

Capital Markets Outlook: Despite the current slowdown, there are glimmers of optimism for later this year. Major industry analysts expect a rebound in investment if interest rates begin to ease. In fact, CBRE is forecasting a 16% jump in commercial real estate investment volume in 2026, which would bring activity nearly back to pre-pandemic levels . The idea is that as borrowing costs gradually come down and price expectations between buyers and sellers align, more deals will start to flow. We’re not there yet, but the second half of 2026 could see momentum pick up. On the equity side, REITs and real estate stocks have been regaining some ground, and private equity dry powder is sitting on the sidelines, ready to pounce on quality assets at improved pricing.

Distress and Signs of Recovery

Maturing Debt Wall: One of the big concerns this year is a wave of loan maturities. About $930 billion in commercial mortgages are set to come due in 2026 – a huge jump after years of easy extensions during the low-rate era. Many of those loans were originated or last refinanced when interest rates were much lower, so refinancing them now is a challenge. Borrowers who can’t extend again or inject more equity may face default or foreclosure. In fact, foreclosure activity has already been ticking up – 2025 saw about a 14% increase in property foreclosure filings compared to the year prior . Analysts warn that defaults could surge, especially in segments like multifamily where an estimated 60% of loans from the frothy 2021–2022 period mature in the coming year . Lenders and borrowers are bracing for some tough workouts ahead.

Distress vs. Opportunity: The flip side of distress is opportunity for those with dry powder. We’re seeing more “dislocation” funds and special situations investors preparing to pick up assets at a discount. For example, one major investment manager just closed a $2.6 billion fund aimed at capitalizing on real estate dislocation . Banks are also starting to sell off troubled loans rather than extend them yet again, which could open the door for note sales or discounted payoffs. All this is to say, 2026 might bring a clearing process in the market – painful for some owners, but potentially healthy in resetting valuations and eventually stabilizing the sector.

Recovery Signs – Co-Working & Hotels: It’s not all doom and gloom. Certain corners of the CRE world are showing resilience or even growth. Notably, the flexible office/co-working sector is surging back. After the pandemic and high-profile stumbles like WeWork, companies large and small still want flexible workspace. New co-working providers and models are stepping in to meet that demand. We’re seeing rising occupancy in shared offices and new locations opening, indicating that flexible leasing is bringing life back to parts of the office market . This is a bright spot in an otherwise challenged office sector.

Hospitality is another relative bright spot: travel demand remains strong, and developers are responding. Hotel construction pipelines are robust in key markets – New York City and Phoenix, for example, are each set to open thousands of new hotel rooms in 2026 . That shows confidence that tourism and business travel will continue recovering to pre-COVID levels. Similarly, retail in top locations has been holding up, and industrial real estate (like warehouses) is still benefiting from the e-commerce and supply chain trends. So while parts of the market (office, some older shopping centers) face distress, other parts (hotels, industrial, niche residential) are on firmer footing or even growing.

Regional Spotlight: Dallas Office Woes

For our regional spotlight today, we’re looking at Dallas, Texas – specifically its downtown office market – as a microcosm of the challenges facing office real estate. Recently, AT&T announced a major office pullout from Downtown Dallas, and the impact has been stark. AT&T’s departure left over 1 million square feet of office space suddenly vacant in its iconic Whitacre Tower . This pushed the downtown Dallas office vacancy rate to about 34% at the end of 2025 – roughly one in three offices in the central business district now sit empty. To put that in perspective, Dallas’s CBD had about 7 million square feet vacant back in 2019; now it’s nearly 9 million vacant despite the inventory actually shrinking as some older buildings got removed or repurposed .

The flight to quality and the suburbs is clearly visible in Dallas. Many companies prefer newer offices in Uptown Dallas or in northern suburban campuses, leaving downtown with an uphill battle to attract or retain tenants . Local analysts estimate that the exit of a giant employer like AT&T could cut downtown property values by up to 30% in that area , as demand and cash flows dry up. City officials and landlords are now pondering solutions – from converting older offices to residential units, to offering incentives for businesses to locate downtown. Dallas isn’t alone in this struggle (San Francisco and other cities are facing similar high office vacancies), but it’s a vivid example: even in a growing Sunbelt metro, the downtown office segment is hurting. The hope is that as space gets repurposed and the economy grows, downtown can find a new equilibrium. For now, though, Dallas’s skyline has a lot of lights off during the workweek.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, January 28, 2026. Here’s what we’re covering today:

• Rate Check: The latest mortgage, insurance, and lending rates for CRE investors
• Market Update: National commercial real estate and capital markets news
• Distress vs. Recovery: Signs of stress and healing in the U.S. CRE market
• Regional Spotlight: A look at Florida’s Tampa Bay area

Rate Check: Lending & Insurance Costs

The Federal Reserve’s policy rate currently sits in a range of 3.5% to 3.75% after a cut last month . All eyes are on the Fed’s meeting this week, where officials are expected to hold rates steady amid cooling inflation. Long-term borrowing costs have eased slightly: the 10-year Treasury yield is about 4.2% , down from its peak last year, offering some relief for commercial real estate financing. Accordingly, commercial mortgage rates have ticked down – well-qualified borrowers are seeing loans start in the low-5% range . While debt is cheaper than a year ago, it’s still high by historical standards, so deal underwriting remains cautious. On the insurance side, costs continue to climb: commercial property insurance premiums rose roughly 8% on average in 2025 , adding pressure to investors’ operating expenses.

Market Update: CRE Investment & Capital Markets

Nationwide, the commercial real estate market is showing signs of stabilization. New data on the multifamily sector illustrates this point: apartment sales volume climbed 9% year-over-year to $165.5 billion in 2025 , even as prices dipped a modest 1.3% . In fact, multifamily cap rates held steady around 5.7% through the past two years , suggesting values have found a floor. Across the broader CRE landscape, property values that were largely flat in 2025 have begun inching up in late 2025 – a tentative recovery driven by investors cautiously re-entering the market. Industry forecasts anticipate a rebound in deal activity: overall U.S. CRE investment volume could rise ~16% in 2026, nearing pre-pandemic levels . Capital is becoming available again, but it’s highly selective – flowing to strong deals and sponsors. As Trepp analysts put it, the dominant theme heading into 2026 is “not a broad-based rebound, but increased resolution and sharper differentiation” in the market . In other words, well-leased, well-capitalized assets are finding financing, whereas weaker properties still struggle to attract capital.

Distress & Recovery: Office Woes and Bright Spots

Distress remains concentrated in certain sectors and markets. The office sector continues to grapple with the aftermath of remote work and refinancing challenges. In the commercial mortgage-backed securities (CMBS) market, office loan delinquencies hit record levels – peaking above 11% in 2025 and ending the year around 11.3% . Many landlords are negotiating extensions or even handing back keys as valuations reset. That said, there are early signs of recovery. The national office vacancy rate, while still high at 18.4%, has improved by 140 basis points year-over-year . Companies are slowly absorbing space, and flexible leasing (like coworking) is helping fill some gaps. Major markets illustrate the split: Manhattan’s office vacancy fell to 13.6% after a sharp occupancy gain in 2025 , reflecting a flight to quality in premier buildings, whereas San Francisco still hovers around 25% vacant despite recent improvement . Other sectors are on firmer footing – industrial and retail demand remains solid, and multifamily fundamentals are steady – but office and older properties will likely stay under stress until more excess space is worked through.

Regional Spotlight: Tampa Bay, Florida

Today’s regional spotlight is Tampa Bay, where an intriguing split-screen picture has emerged. On one hand, the area is experiencing a surge in distress: Tampa currently leads the nation in foreclosure rates . Many homeowners have been squeezed by soaring carrying costs – insurance premiums, property taxes, and HOA fees jumped 30–50% in the past few years , straining budgets and pushing some to default. But on the other hand, new construction and rentals are thriving . High homeownership costs mean more people are renting, so apartment occupancies and rents are strong. As one local expert notes, if people can’t afford to buy, “they have to rent,” and the rental market is doing very well . Builders are still finding demand too – new homes in the Tampa area are selling at or near cost, often below appraised value, which attracts value-minded buyers . Investors have adjusted strategies: many are shying away from single-family flips and instead targeting duplexes, multifamily, or even commercial properties that offer better cash flow under today’s math. Interestingly, Tampa’s inventory has finally been getting absorbed – listings that sat for a year or more are now seeing multiple offers as 2026 begins . The state is also considering measures like property tax relief and limits on institutional homebuyers, which could further reshape this market. Overall, Tampa Bay’s real estate appears to be at a turning point: still dealing with fallout from high costs and foreclosures, yet on the cusp of a broader recovery as buyers, renters, and investors recalibrate.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, January 27, 2026. Here’s what we’re covering today: the latest moves in interest rates and financing costs, surging insurance premiums for property owners, a check on the commercial real estate outlook as we kick off 2026, signs of both distress and resilience in the market, and a spotlight on how one major company’s headquarters move is rattling a big city’s office sector.

Let’s start with interest rates. The Federal Reserve’s recent actions have brought some relief for borrowers. The Fed’s benchmark rate now sits around 3.75% to 4.00% after two rate cuts last fall . That’s down from the 5%+ highs of last year, making debt a bit cheaper than it was a year ago. In fact, the average 30-year fixed mortgage rate is about 6.1%, nearly a full percentage point lower than this time in 2025 . Commercial loan rates likewise have pulled back slightly, tracking the decline in Treasury yields – the 10-year Treasury is hovering in the low-4% range at the moment . However, Fed officials have indicated they don’t plan to cut further in the near term . In other words, we might be at a plateau for a while. So while financing costs are off their peak, they’re still elevated, and prudent investors are locking in rates where they can and being cautious with leverage.

On the insurance front, commercial property owners continue to feel the squeeze. New data show that commercial property insurance premiums climbed sharply at the end of 2025 – about an 8% average jump in the fourth quarter compared to the prior year . General liability coverage saw similar pain, ending the year over 7% higher on average . These are some of the steepest increases in years, and they push operating costs higher for landlords. There is a bit of good news in certain lines: for example, commercial auto insurance rate hikes actually eased slightly in late 2025, and workers’ compensation premiums even notched modest declines . But overall, the trend is clear – insurers have been charging more across most commercial lines, citing higher rebuilding costs and weather risks. Investors in high-risk regions, especially, are budgeting for significantly pricier insurance renewals than they did a couple years ago.

Now let’s zoom out for a national CRE and capital markets update. Despite higher debt costs and economic headwinds, the outlook for 2026 has a cautiously optimistic tint. Major industry analysts forecast a rebound in investment activity this year. For instance, CBRE projects U.S. commercial real estate investment volume could rise about 16% in 2026 to roughly $562 billion, nearly returning to the pre-pandemic average . Part of that is pent-up capital on the sidelines finally stepping in as prices adjust. In fact, private real estate funds are raising money again – global fundraising totaled about $222 billion in 2025, which was the first annual increase since 2021 . We’re seeing large players stockpile dry powder to deploy: one notable firm, Heitman, just closed a $2.6 billion fund aimed at scooping up distressed or undervalued assets . On the leasing side, demand is gradually improving. Sectors like industrial and multifamily remain solid, with high occupancy and rent growth stabilizing. Retail is quietly on the upswing too – chains in grocery, discount, and services are expanding again, and new store openings are starting to outpace closings. Even the beleaguered office sector is showing a bifurcated recovery: top-tier, modern office buildings in prime locations are attracting tenants and seeing occupancy gains, while older, less efficient buildings continue to struggle. In fact, CBRE expects the flight-to-quality trend to tighten prime office vacancies so much that overall office leasing could surpass 2019 levels by the end of this year . The takeaway is that the capital markets are thawing and investors are adjusting to the new normal. There’s growing confidence that the worst of the correction may be behind us if the economy stays on track.

What about distress and recovery signals? Thus far, the feared tsunami of distressed sales in commercial real estate has been more of a trickle. Market analysts note that distressed property sales never spiked the way they did after 2008 – by mid-2025 only around 3% of CRE sales were distressed, compared to about 20% in 2010 . Values have come down perhaps 10% from their peak on average (versus 20%-plus drops during the Great Financial Crisis) . There is stress out there, especially in sectors like office and some over-leveraged multifamily deals, but so far owners and lenders have managed to avoid a fire-sale scenario. One big reason is the rise of private debt funds stepping in behind the scenes . Unlike in past downturns, there’s a whole class of mezzanine lenders and alternative capital providers working to recapitalize troubled assets rather than immediately foreclose. They’re injecting rescue capital, extending loan terms, and negotiating solutions that keep properties out of bankruptcy. This means distress is getting resolved more gradually or being tucked away inside balance sheets, rather than flooding the market with discounted properties. It’s a double-edged sword: it helps stabilize the market, but it also means the cleanup process could take longer. On the flip side of distress, we are seeing signs of recoveries in certain niches. For example, the demand for flexible office space is surging – co-working operators report a jump in occupancy as more companies adopt hybrid work and seek shared offices instead of long-term leases . And as mentioned, retail is seeing a modest revival in brick-and-mortar activity, which is a welcome development after years of e-commerce pressure. All in all, the CRE market entering 2026 feels more stable than a year ago, but with a clear gap between winners and losers: quality assets and well-capitalized investors are weathering the storm, while others continue to face an uphill battle.

For our regional spotlight today we turn to Dallas, Texas, where a major corporate move is shaking the local real estate scene. AT&T, one of the city’s largest employers, has announced it will relocate its global headquarters from Downtown Dallas to a new campus in suburban Plano. This decision, while not effective until a couple years from now, is already casting a long shadow on the central business district. AT&T’s current home, the Whitacre Tower downtown, accounts for over 1 million square feet of office space – and once the company leaves, that space will go vacant . To put that in perspective, downtown Dallas was already struggling with high office vacancy, and this will push it to new extremes. The office vacancy rate downtown has now ballooned to about 34% , one of the highest in the country, with roughly 9 million square feet sitting empty. City officials and landlords are understandably concerned. Some estimates suggest AT&T’s exit could ultimately wipe out around 30% of downtown’s property value – roughly a $2.7 billion hit when you factor in lost business activity and declining rents . It’s a gut-punch for a downtown that was hoping to rebound. The situation highlights a broader trend: many companies in Dallas-Fort Worth (and across the U.S.) are gravitating to newer, mixed-use developments in the uptown and suburban submarkets, where they can offer employees more modern amenities, campus-style offices, and shorter commutes. In Dallas, firms like Bank of America, Invesco, and Deloitte have already drifted away from the traditional downtown core in favor of these newer districts . The result is that older towers in the central city – especially ones built for single tenants, like Whitacre Tower – face a very challenging road ahead. Local leaders are responding with plans to tackle downtown’s challenges (from public safety to incentives for redevelopment), and some are even floating bold ideas like converting office towers for other uses. But for now, Dallas’ downtown office market is a cautionary tale of what can happen when a big tenant leaves a city center that hasn’t kept up with the times. The silver lining? The Dallas-Fort Worth region as a whole remains economically strong – in fact, it’s attracting data centers, industrial projects, and residents at a rapid clip – so there’s confidence that with the right reinvention, downtown Dallas can find new life. But it will take time and creative effort to fill those million-plus square feet left behind by AT&T.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, January 26, 2026. Here’s what we’re covering today: from financing costs and interest rates to the latest on commercial real estate markets. We’ll unpack the day’s mortgage, insurance, and lending rates, discuss national CRE and capital markets trends – including signs of distress and recovery – and spotlight a standout regional story in Houston’s retail sector.

Interest Rates and Financing: Financing conditions for commercial real estate have eased slightly compared to last year, but borrowing costs are still a major factor. The Federal Reserve’s benchmark rate now sits around 3.75% to 4.00% after rate cuts last fall, and long-term rates have stabilized. The 10-year Treasury yield is hovering in the low-4% range (about 4.2% as of last week) , which helps set the tone for mortgage rates. Indeed, commercial mortgage rates for the most qualified properties are starting just above 5% . However, less conventional or riskier loans still come with high costs – think bridge loans and other short-term financing that can carry rates near 9% . On the lending front, there are early signs of thawing: regional banks are cautiously increasing their CRE lending this year as interest rates inch down and credit conditions show some stability . This is a welcome development for investors, though underwriting remains prudent. Meanwhile, insurance costs continue to bite. Property insurers hiked premiums significantly over the past year; homeowners saw about a 6% average increase nationwide, and some high-risk markets endured double-digit jumps . Commercial property owners, especially in disaster-prone areas, are feeling that squeeze. Regulators in states like New York are even debating profit caps for insurers amid mounting affordability concerns . All told, the cost of capital and coverage remains a key challenge, even as interest rate pressures moderate.

National CRE Markets and Capital Flows: Nationally, the commercial real estate market is sending mixed signals. On one hand, global investors appear ready to pour money back into U.S. real estate – an estimated $144 billion of global capital is set to deploy into CRE in 2026 . Big investment managers are raising record-sized funds to capitalize on perceived opportunities. For instance, Heitman just closed a $2.6 billion fund aimed at distressed and value-add deals, betting that now is the time to buy into a market reset. REITs, too, managed to raise nearly $80 billion in 2025, indicating that many players are positioning for a rebound. And in a hopeful sign, U.S. office vacancies have begun to tick down in early 2026 after peaking last year . Still, caution is warranted. A “debt wall” of loan maturities is looming over the next few years. About $1 trillion in commercial mortgages come due in 2026 – roughly double the normal annual volume – and even more (up to $1.3T) will peak in 2027 . A lot of this debt was issued when interest rates were far lower, so borrowers refinancing now are facing rates that can be 50% to 100% higher than before . This squeeze is putting pressure on some owners and lenders. We’re seeing more loans enter distress, and specialty debt markets like CRE CLOs have seen rising default risks . The good news is that industry leaders don’t foresee a full-blown crisis – many lenders and investors are finding ways to extend or restructure loans, and there’s active buyer interest in discounted assets. In short, 2026 is shaping up as a turning point: the market is moving from “survive” to “adjust and invest.”

Distress and Recovery Signs: The divide between winners and losers in CRE is clearer than ever. Office properties remain the most troubled segment. In fact, one prominent New York landlord just lost its Midtown Manhattan office tower to foreclosure when it couldn’t support the debt at 750 Lexington Avenue – a stark example of how far office values have fallen in some cases. Office leasing is improving only at the top end: premier Class A buildings with desirable locations or tech-focused tenants are stabilizing (helped in part by new demand from booming sectors like AI), but many older Class B and C offices are languishing with high vacancies and uncertain futures . Some may never recover without conversion or major repurposing. By contrast, other property sectors are showing resilience. Retail and hospitality have bounced back in many markets, aided by years of limited new construction that kept supply in check . Well-located shopping centers and hotels are seeing solid demand now that consumers and travelers have returned. Multifamily apartments remain relatively robust too – especially in fast-growing metro areas – with occupancy and rent growth holding up as new supply tapers off . Even niche sectors like industrial and data centers are thriving; demand for logistics space stays strong, and the data center boom (particularly in tech-friendly locales) continues as companies expand their cloud and AI capacity. In short, the CRE landscape is bifurcated: pain in some corners, but plenty of bright spots in others.

Regional Spotlight – Houston Retail: For today’s metro highlight, we turn to Houston, Texas, where the retail real estate scene is notably vibrant. Houston’s retail properties have maintained remarkably tight occupancy, bucking any national slowdown. In fact, retail occupancy in Houston has topped 95% for the 12th year in a row . Landlords are enjoying high tenant demand and rising rents across key shopping districts . What’s driving it? A combination of strong consumer activity, limited new retail development, and the metro’s continued population and job growth. Essentially, space at malls and neighborhood centers is scarce, and retailers are competing to lock in locations. This long-running “retail streak” means Houston’s retail landlords have had stability even through economic cycles – a bright spot that stands in contrast to struggling office buildings or overbuilt apartment markets elsewhere. Houston’s success story illustrates how certain local markets and property types can thrive due to unique supply-demand dynamics. It’s a reminder that in real estate, all markets are local, and Houston’s retail sector is a case where local strengths are outweighing broader headwinds.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, January 23, 2026. Here’s what we’re covering today: the latest CRE lending rates, signs of market recovery amid distress, and a spotlight on Atlanta’s CRE scene.

Interest rates are finally offering some relief for real estate investors. The Federal Reserve’s benchmark rate now sits at 3.75% to 4.00% after two cuts last fall , making borrowing costs broadly cheaper than a year ago . Mortgage rates have pulled back as well – a 30-year fixed loan hovers around 6.2%, nearly 0.8% lower than this time last year . In commercial lending, rates range from roughly 5.2% into the low double digits . Banks are quoting about 5.3% to 8.7% on standard commercial mortgages , and life insurers are near 5.3% to 8.5% . One cost still climbing is property insurance: in storm-prone Florida, commercial insurance premiums jumped 20–30% above the national average last year .

Nationally, the commercial real estate market is showing signs of stabilizing. After a major price correction in 2023, values have largely stopped falling and some sectors are even seeing modest upticks . Higher interest rates forced sellers to reset expectations, but now buyers and sellers are slowly finding common ground on pricing . The Fed’s recent policy pivot toward easing has made future financing costs more predictable, which is improving investor confidence . Lenders are cautiously returning – new loan originations climbed about 16% in 2025 and are projected to keep rising in 2026 . With stocks and bonds less exciting lately, capital is rotating back into real estate . In fact, analysts expect around $144 billion of global institutional money to flow into CRE this year as investors bet on a rebound . Meanwhile, property fundamentals remain relatively solid in several areas. Apartment demand is holding up after a wave of new supply, and industrial warehouses still enjoy strong logistics-driven demand . Even necessity-based retail and high-quality office assets have shown resilience amid the turbulence .

Still, distress in the market hasn’t gone away. Office buildings in particular continue to struggle. In New York, one lender just foreclosed on a Midtown Manhattan tower for a token $1,000 to wipe out a $156 million mortgage – a stark example of how far office values have fallen. Out west, San Francisco’s famed 225 Bush Street is in default on a $350 million loan, which the lender is now looking to sell off . And in Burbank, California, a once-occupied office that lost its sole tenant has pushed an $87 million loan into special servicing . Even some shopping malls are under stress, with one major mall in northern California seeing its revenue plunge and its $98 million loan head to workout specialists . There is a silver lining: distressed assets are attracting opportunistic buyers looking for bargains, hoping to turn around these properties once repriced.

For our regional spotlight today, we turn to Atlanta. Atlanta is consistently ranked a top ten U.S. real estate market , and experts there anticipate more stability in 2026. The metro saw a slight cooldown in new projects like warehouses after the pandemic boom, but its data center industry is still red-hot and expected to keep expanding in 2026 . Those big tech-driven developments – along with steady population and business growth – are fueling optimism in Atlanta despite higher interest rates. If credit conditions continue to improve, Atlanta’s combination of reset prices and solid demand could make it one of the first markets to regain momentum.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, January 22, 2026. Here’s what we’re covering today: the latest on interest rates and financing costs, a look at the national commercial real estate market’s momentum, signs of both distress and recovery in the sector, and a regional spotlight on a booming Sunbelt metro.

Interest Rates Update: Borrowing costs continue to ease from their peak. The Federal Reserve’s benchmark rate currently sits in a 3.75%–4.00% range after a late-2025 rate cut , and no further cuts are expected in the near term. Long-term rates have stabilized; the 10-year Treasury yield is hovering around the mid-4% range . This has translated into lower mortgage rates than we saw a year ago. The 30-year fixed residential mortgage now averages roughly 6.1%—recently hitting its lowest level since late 2024 . For commercial real estate investors, loan interest rates remain elevated but are more workable than last year’s. Typical commercial mortgage deals are getting done in roughly the mid-5% to high-7% range for stable properties, with more complex or riskier financings still reaching into the low double-digits . In short, financing is broadly cheaper today than it was a year ago, a bit of good news for deal makers .

Insurance Market Relief: After six years of sharp increases, property insurance costs are finally showing signs of relief for owners. Expanded capacity and competition in the insurance industry caused commercial property insurance rates to level off and even decline slightly in late 2025 . In fact, industry surveys noted that average commercial property premiums decreased about 0.2% in the third quarter – the first outright drop in prices since 2017 . It’s a modest reversal, but a welcome one, as high insurance premiums had been squeezing property cash flows in recent years. Barring any major catastrophes, experts expect this more stable insurance climate to continue into 2026.

Market Sentiment and Capital Markets: The tone in the commercial real estate capital markets has turned surprisingly upbeat moving into 2026. The CRE Finance Council’s latest Board of Governors Sentiment Index climbed to 125.4, approaching its all-time high . Industry leaders are increasingly optimistic – in the newest survey, zero respondents voiced a negative outlook on interest rates or the CRE finance environment . In contrast to the caution of a year ago, nearly three-quarters of executives now hold a positive outlook for the industry, and an overwhelming 97% expect borrower demand for loans to increase over the next 12 months . Lenders and investors seem to be finding their footing again: higher interest rates are no longer viewed as deal-killers, and liquidity is slowly improving. In practical terms, debt and equity capital is more available now than it was last year, and transactions are starting to pick up as a result. Financing demand is high, and lenders – from banks to private debt funds – are competing for business again.

Distress and Recovery Developments: We’re seeing a bifurcated market with both encouraging improvements and persistent challenges. On one hand, office property vacancies have finally begun to inch down after a multi-year surge. The national office vacancy rate peaked at nearly 20% in early 2025 and eased to about 18.4% by December . Major markets like New York and San Francisco even saw vacancies decline by several percentage points last year as companies cautiously absorbed space and landlords repurposed some buildings. Rent levels have proven surprisingly resilient on average, and flexible workspace operators are expanding to help fill excess space. These are hopeful signs of stabilization for a sector that has been hit hard. On the other hand, distress remains a key theme. Office-related loans are under severe strain – the delinquency rate for office loans in CMBS (commercial mortgage-backed securities) just hit an all-time high around 11.7% . In plain English, a record share of securitized office mortgages are in default as remote-work impacts linger. Banks and bondholders are working through these troubled assets, often by extending loans or finding ways to restructure debt, but the process is ongoing. Moreover, a wave of maturing debt is looming over the market. Approximately $936 billion in U.S. commercial mortgages are set to come due in 2026, which is about 19% more than the volume that matured in 2025 . Many of those loans will need refinancing at today’s higher rates. The good news is that interest rate cuts and rising property values have improved some refinancing math; the bad news is certain property types – especially older offices – may still struggle to find new financing without significant equity injections or price reductions. How the market navigates this “maturity wall” in the coming months will be a key storyline. We’re watching for any uptick in foreclosures or forced sales, but so far lenders are showing patience and a willingness to work with borrowers, hoping that better conditions in 2026 will ease the crunch .

Regional Spotlight – Charlotte: In our regional spotlight today, we focus on Charlotte, North Carolina – a metro that’s emerging as a standout performer. Charlotte’s commercial real estate scene is benefiting from robust economic and demographic growth. The city has been drawing finance, tech, and manufacturing firms, and its population growth consistently ranks among the highest in the nation. Office-using employment in Charlotte rose by an impressive 3.3% last year, the fastest growth rate of any major U.S. market . That expansion is fueled by business-friendly policies and an influx of new residents, which in turn is driving demand for apartments, offices, and industrial space. Investors have noticed Charlotte’s momentum. After a quieter period in 2024, investment activity bounced back strongly in 2025 as interest rates began to stabilize. Institutional buyers returned to Charlotte, drawn by its long-term growth story, and deal volume started climbing again. Local market experts report that this bounceback in commercial property sales is expected to continue through 2026 . Construction has also moderated to keep supply in check – fewer new projects are breaking ground, which helps existing properties lease up. With lower relative costs, a diversifying economy, and improving capital availability, Charlotte is positioned as an “up-and-coming” hub where optimism is high. It’s a regional example of how Sunbelt markets, in general, are powering through the broader CRE slowdown and attracting capital even as some coastal cities lag. We’ll be watching Charlotte to see if it can maintain this growth trajectory in the year ahead.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, January 21, 2026. Here’s what we’re covering today: the latest on interest rates and insurance costs, a pulse check on national commercial real estate and capital markets, signs of distress and recovery in the market, and a spotlight on Chicago’s office sector.

Rates Update: Financing conditions are gradually improving for commercial real estate investors. The Federal Reserve’s year-end move to cut its benchmark rate has brought the federal funds range down to the mid-3% level , and borrowing costs are now broadly lower than a year ago. Mortgage rates in particular have fallen to their lowest levels in over three years – the 30-year fixed-rate average is just about 6.1%, down from over 7% at this time in 2025 . That dip is already spurring a jump in loan applications and refinances. On the insurance front, after a turbulent couple of years, the commercial insurance market is finally seeing some relief. Premiums are flattening or even ticking down for well-managed properties . However, in disaster-prone areas, insurers remain cautious – high hurricane, wildfire, and flood risks are keeping coverage terms strict and rates elevated . In fact, insurance costs have become so acute that nearly half of U.S. homeowners are considering relocating due to rising premiums and climate risks . For commercial owners, the takeaway is clear: strong risk mitigation and documentation are now essential to keep insurance costs in check.

Market & Capital Markets: On the national stage, the commercial real estate outlook is turning more optimistic as we head deeper into 2026. A major forecast from CBRE predicts a 16% rebound in U.S. commercial real estate investment activity this year, potentially reaching about $562 billion in volume – nearly back to pre-pandemic averages. Investor sentiment is improving as pricing adjusts and debt becomes a bit cheaper. Even the large capital players are showing renewed confidence: Blackstone’s flagship real estate fund, BREIT, posted an 8.1% return in 2025 – its best performance in three years – thanks in large part to booming data center investments. That marks a sharp turnaround from its near-flat returns during the 2023 downturn and signals that momentum in commercial real estate may be shifting positive. We’re also seeing credit markets thaw slightly. Agency CMBS bond spreads have been tightening as lending caps for multifamily rise , and banks report that borrower demand for new loans is strengthening now that interest rates have come off their peaks . Overall, capital is cautiously coming off the sidelines. There’s still plenty of scrutiny on deals – lenders and investors are favoring quality assets and dependable cash flows – but there’s a sense that the worst of the capital markets freeze is behind us. As one index shows, commercial deal flow at the end of 2025 was clearly higher than the year before, suggesting a healthier start to 2026 .

Distress & Recovery Developments: Now, not everything is rosy – distress remains a key part of the story in several sectors, even as some green shoots emerge. Nowhere is that dichotomy clearer than in the office market. Office landlords are still grappling with elevated vacancies and loans under pressure. A stark example came in Texas: AT&T’s departure from its downtown Dallas tower this month suddenly left over one million square feet of office space empty , underscoring how corporate consolidations are hitting city centers. Office loan defaults and delinquencies have been ticking up, but interestingly, there are hints of stabilization. Industry data show that the volume of commercial mortgages in special servicing (essentially troubled loans being worked out) edged down in December , thanks in part to some troubled office and hotel loans getting resolved or restructured. And in an encouraging sign, office usage is slowly on the mend: building foot traffic nationally just hit its highest level since the pandemic began . More workers are coming back to desks, and landlords hope that trend will translate into fewer space downsizes and more lease renewals in 2026. Meanwhile, in the multifamily sector, higher interest rates and expenses have caused pockets of distress, but opportunistic investors are swooping in. In Houston, for example, a distressed apartment high-rise was recently acquired by a new owner planning to rebrand and renovate the property – turning crisis into chance. This kind of rehab-and-reposition play is something we expect to see more of in markets where property values dipped last year. In short, 2026 is kicking off with a mix of challenges and hopeful signs: some owners are feeling pain, yet others are finding that today’s distress could be tomorrow’s deal.

Regional Spotlight – Chicago: Finally, let’s zoom in on Chicago’s commercial real estate scene, which encapsulates many of these national trends. The Chicago CBD (central business district) office market endured a tough 2025 but is showing glimmers of life. According to fresh numbers from Cushman & Wakefield, downtown Chicago logged 6.3 million square feet of new office leases in 2025 – that’s a 7% increase over 2024 and the highest annual leasing volume the Windy City has seen since 2019. Much of that activity was concentrated in high-quality buildings; Class A offices, especially in hotspots like the West Loop, accounted for the bulk of the leasing as tenants sought out modern, amenity-rich space. However, for all those new leases, the market is still working through a lot of empty space. Net absorption in Chicago’s CBD stayed negative for the ninth consecutive quarter , meaning more offices emptied out than were filled. By year’s end, the downtown office vacancy rate hit about 26.9% – a record high. In simpler terms, more than a quarter of Chicago’s prime office space is sitting vacant, a reflection of ongoing downsizing and sublease givebacks. There is a silver lining: the very top-tier “trophy” office towers are faring much better, with vacancy in those marquee buildings down to roughly 15% . In fact, the highest-quality high-rise offices in Chicago are now seeing single-digit vacancy rates as some companies “flight to quality,” upgrading to better space even if they need less of it overall. This bifurcation – strong demand for the best properties, weakness in the rest – is a theme playing out not just in Chicago but in many cities’ office markets. Local developers and officials will be watching closely in 2026 for any momentum from the improved leasing activity, hoping it can chip away at that vacancy overhang. For now, Chicago’s story is one of a hard-hit market slowly finding its footing, with resilience at the top end.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, January 20, 2026. Here’s what we’re covering today: interest rates hold steady, insurance costs remain a pain point, signs of life in the commercial real estate market, continued distress in some sectors, and an office comeback story in San Francisco.

Mortgage rates are holding near their lowest levels in months. Freddie Mac’s latest survey puts the 30-year fixed around 6.06% – slightly down from last week – which is a welcome stability after the roller coaster of recent years. The Federal Reserve’s benchmark rate sits around 3.5% to 3.75% thanks to a few cuts last year, and futures suggest only minor moves ahead. That means borrowing costs remain well above pre-pandemic levels, but at least we’re not climbing higher for now.

Commercial insurance costs, meanwhile, continue to bite. After 27 straight quarters of premium hikes through mid-2024 , property insurers finally hit pause late last year . Even so, premiums are still near record highs – some owners saw insurance double as a share of expenses since 2020 . In disaster-prone markets like Florida and Texas, rates are especially steep, though the hope is that a stabilizing insurance market in 2025 will carry into this year.

On the national real estate front, we’re seeing signs of life in dealmaking. U.S. commercial property prices have been inching up for five months straight as of October . CoStar’s index showed investment-grade properties leading the recovery – values were up about 2% year-over-year and sales volume jumped 11% from the prior month . With the Fed’s rate hikes reversing course slightly, financing has gotten a touch cheaper and buyers are tiptoeing back in . Blackstone’s giant real estate fund even notched an 8.1% return last year, powered by booming demand for data centers , hinting that some sectors are pulling the market upward.

Still, not everything is rosy. Distress in commercial real estate remains a major theme. Office properties are the glaring weak spot – roughly 11.8% of office loans are delinquent, an all-time high as remote work leaves many buildings half-empty. Banks have mostly weathered the storm so far , often extending maturing loans and hoping lower interest rates will help . But 2026 will be a real test: about $936 billion in commercial mortgages come due this year – nearly 19% more than last year – which means many owners will be refinancing from loans in the sub-5% range to new rates in the 6%+ range . We’ll be watching how many of those get reworked and whether any sectors falter under the strain.

For our regional spotlight today, we turn to San Francisco – a city that became a poster child for office distress, but is now showing glimmers of a comeback. The Bay Area’s tech sector, especially a wave of artificial intelligence firms, breathed some life into the market last year . San Francisco recorded five consecutive quarters of positive net office absorption through the end of 2025 , and the city’s office vacancy actually fell by about 3.7% over the year – the sharpest drop since 2011 . Major developers like Hines are even exploring new projects there again . It’s early, but if 2025’s momentum continues, 2026 could finally be the year San Francisco’s office market stops being an outlier for all the wrong reasons .

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!