A look at 2025 commercial trends and 2026 projections
Talk to anyone in the commercial real estate industry, and they will sing the praises of the multifamily sector and how strong it was in 2025.
The data backs up their talk. Agora, a real estate investment management software and services firm, analyzed its 2025 data and released a report breaking down last year’s winners and losers and projecting what 2026 has in store.
The results were unsurprising, with multifamily capturing 48.61% of all capital raised. The sector also generated 40.31% of total investment returns in 2025.
While some of the results in the report were unsurprising, some brokers may be surprised to find out which region of the country performed the strongest. It was, in fact, the Southeast that led all regions of the country with 42.06% of capital raised.
Agora’s chief executive officer said there was a common thread for investors regarding which sectors and regions performed the strongest.
Bar Mor (pictured top), founder and CEO of Agora, said it all came down to investor confidence in the multifamily sector and the Southeast region.
“It’s pretty straightforward when you take a step back,” Mor told Mortgage Professional America. “If you look at where both capital and returns landed, it all points to the same thing. Investors leaned into what they felt most confident about. The multifamily segment accounted for almost half of all capital and a large share of returns, and the Southeast showed a similar pattern at the regional level.
“That’s not random. Those are the areas where the story is clear. There is population growth, increased housing demand, and stable occupancy. Even the shift you see later in the year, with residential picking up in Q4, is more of that same theme.”
Finding reliable areas to invest
The Southeast led all regions with 42.06% of capital raised and 40.51% of total returns. The states considered to be in the region in this report were West Virginia, Virginia, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Arkansas, Louisiana, and Florida.
While confidence was the overarching reason for increases in certain sectors, Mor said each sector also had its unique reasons for success.
“Where things change, however, is when you try to discern why those sectors are working,” Mor said. “For instance, housing is driven by affordability and demand, while industrial is more about logistics and supply chains. But the behavior is consistent. People are putting money into what feels most reliable right now.”
As far as which regions saw the strongest years, he said it was important to look at the full-year picture to really be able to tell why certain regions performed well.
“I think those dips make more sense if you look at them as the other side of the same coin,” he said. “Not all regions moved the same way. For example, the Southeast kept gaining momentum through the year, while places like the Northeast were flatter and then dropped off a bit in Q4. That doesn’t really read as regions struggling; it’s more a sign that investors became more focused over time.
“As activity picked up, especially toward the end of the year, capital wasn’t being spread evenly. It was going to the markets where the growth story felt strongest. So, it’s less about weakness and more about prioritization.”
Projecting throughout 2026
Mor is confident that the multifamily sector will continue to perform well, in large part due to the inventory shortages in many parts of the country.
“The housing problem hasn’t been solved,” he said. “If anything, it’s gotten more pronounced. That’s why multifamily keeps showing up at the top. There’s built-in demand that’s difficult to ignore. I don’t see that changing, but I do think it gets more nuanced. Supply is picking up in some markets, so it’s not just ‘multifamily wins everywhere.’ It becomes more about picking the right deals, looking at the right submarkets, and the right price points. But as a category, it’s still the most dependable.”
Commercial real estate tends to be more rate-agnostic than consumer mortgages. That doesn’t mean that it isn’t impacted by lower rates. Mor said the lower rates in the fourth quarter of last year and early first quarter of 2026 allowed investors who had been waiting for the right time to act to jump into big deals.
It showed up in the stats, as residential reached 39.61% of all capital raise projects in the fourth quarter. That was the highest quarterly share of the year.
“Lower rates helped, but I wouldn’t say that tells the whole story,” he said. “Q4 felt more like a release valve. There was a lot of capital sitting on the sidelines, waiting for things to feel a bit more workable, like pricing, financing, all of it. Once that shifted even slightly, deals started moving. And it wasn’t across the board. The activity was still concentrated in certain sectors, which tells you it wasn’t just about rates. Again, it was about where people already had confidence.”
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