CNBC's Diana Olick reports on the outlook for commercial real estate in 2026.

A recent Deloitte survey indicates that 83% of commercial real estate (CRE) leaders expect their revenues to improve by the end of 2026, though this is a slight decline from the previous year's outlook. The survey also found that 68% of respondents anticipate higher expenses in the coming year, and fewer plan to increase spending, reflecting a more cautious sentiment compared to last year, but still more optimistic than in 2023.

Sector-specific trends include a projected drop in office vacancy rates below 18% and strong demand for data centers, where new construction is already fully pre-leased in several major markets. Multifamily rents are easing due to increased supply, and property technology, particularly artificial intelligence, is playing a growing role in investment and operations decisions across the industry.

Commercial real estate leaders expect higher expenses in 2026

Welcome back. Real estate is this year's biggest laggard among the S&P 500 sectors. It's only about a half a percent. Diana Olick taking a look in this week's property play of what lies ahead for commercial real estate in 2026. Any relief, Diana. Well, unfortunately, Sarah, CRE leaders are slightly less optimistic than they were ahead of 2025. That according to a Deloitte survey, 83 percent of respondents said they expect their revenues to improve by the end of 2026. That's compared with 88 percent last year. Fewer respondents said they plan to increase spending while more expect to keep spending flat. Sixty eight percent said they anticipate higher expenses overall next year. Sentiment is down from last year, but well above that of 2023. OK, so let's drill down on specific sectors, starting with office, which seems to have bottomed. Vacancy rates are expected to drop below 18 percent as more tenants return to the market. That, according to Collier's, there will continue to be a flight to quality as Class A buildings in many markets are now almost fully occupied. Office construction is also at its lowest level in over three decades, according to Yardi. Now, in multifamily, rents are starting to ease as a record level of new supply continues to make it through the pipeline. Multifamily has led investment sales volume since 2015, and there are no signs of this changing. But its share of total volume is expected to ease somewhat as investors allocate more capital to things like office data centers and retail, according to Collier's. Speaking of data centers, the darling of 2025 with demand significantly outpacing supply, Deloitte called the sector a clear bright spot in the U.S. commercial real estate landscape. It pointed to nine major global markets where 100 percent of the new construction pipeline is already fully pre leased. Data centers, however, do face some headwinds in financing grid capacity, which we talk about a lot, zoning and even local politics. Now, for the outlook on more sectors, as well as property technology prop tech, make sure you're signed up for the CNBC Property Play newsletter. That's CNBC dot com forward slash property play. It's out, guys. I mean, it just it's a reminder, Diana, that that a lot of these real estate companies are now entwined with the trade. And if there is a sort of bubble that burst or a boom, that bus, they're going down with it. Yeah, absolutely. It's amazing how much, you know, we have a section called Prop Tech Talk in the newsletter. And the number of pitches I get for that specific section is just off the charts. Property technology, as well as the data just informing investors about commercial real estate, has really just gone kind of, as you said, off the charts with A.I. And it is going to be reliant on that. It's not just data centers, it's operations facilities with every type of building out there. And again, the capital coming into real estate, that it's being told what to do by A.I.

The United Arab Emirates says it's withdrawing its remaining forces from Yemen. The move comes after Saudi Arabia bombed a port in Yemen, saying it targeted an arms shipment intended for a UAE-backed separatist force.

Al Mukalla

Saudi Arabia bombs port in Yemen

Eurostar suspended train services in Europe on December 30 after a power supply issue in the Channel tunnel, sparking travel chaos for passengers during the very busy New Year period. Its services to and from London “are suspended until further notice" and the company advised its passengers to rebook their journeys for other days.

Paris

Eurostar cancels all services after power issue

In an overnight strike, the Saudi military hit a Yemeni port saying they were neutralising a weapons shipments arriving from UAE. The UAE has denied the shipment contained weapons and claimed the vehicles were not intended for any groups. Both countries have supported the fighting sides in the over-decade long war in Yemen, but this strike has turned this rivalry into an open dispute.

The UAE denies shipping weapons to Yemen after overnight Saudi strike

The Kremlin said Tuesday it would toughen its negotiating position in talks on ending the war in Ukraine after accusing Kyiv of attacking a Russian presidential residence — an allegation that Kyiv said was baseless and intended to prolong the conflict.

Moscow

Russia will toughen negotiating stance on war in Ukraine

China fired rockets into waters off northern and southern Taiwan on Tuesday (December 30) and deployed new amphibious assault ships alongside bomber aircraft and destroyers on the second day of its most extensive war games.

Taipei City

China fires rockets towards Taiwan in war games simulating blockade

President Donald Trump on Monday confirmed an alleged drug-related site was targeted during a recent strike, saying, "they load the boats up with drugs, so we hit all the boats and now we hit the area." Trump did not say when the strike happened or exactly where.

Caracas

U.S. strike hits Venezuelan port facility

The search for Malaysia Airlines flight 370 that went missing in 2014 with 239 people on board is expected to resume Tuesday (December 30). The Malaysian government and a private marine robotics company say they will use advances in technology to aid in the search.

Kuala Lumpur

Search resumes for Malaysia Airlines flight that disappeared in 2014

The two countries have agreed to hold fire, freeze troop movements and allow civilians to return home under a new agreement.

Krong Poi Pet

Thailand-Cambodia ceasefire holds as 72-hour observation period ends

Head of Yemen's presidential council, which is supported by Saudi Arabia, says UAE-backed forces in the country should leave within 24 hours.

Yemen’s presidential council cancels UAE defence deal

U.S. President Donald Trump said the United States could support another major strike on Iran were it to resume rebuilding its ballistic missile or nuclear weapons programs and warned Hamas of severe consequences if it does not disarm.

Florida

Middle East Conflict

Trump warns Iran of possible strike, urges Hamas to disarm

U.S. hit an area in Venezuela where boats are loaded with drugs, Trump says, as Pentagon carries out another deadly strike in the Pacific. This claim follows a series of U.S. strikes on boats in the Eastern Pacific, raising the total number of known strikes to 31 and resulting in over 100 deaths.

Trump claims attack on a dock in Venezuela, strikes kill two in Pacific

The Taiwanese government says it has placed its forces on alert as China intensifies its military presence in the Indo-Pacific Ocean and launches air, navy and rocket drills around the island.

Taiwan's forces on alert as China launches military drills

Ukrainian President Volodymyr Zelenskyy is denying Russian Foreign Minister Sergei Lavrov’s claim that Ukraine tried to attack President Vladimir Putin's residence in northern Russia.

Kyiv

Ukraine Invasion

Zelenskyy denies Russian claim that Ukraine targeted Putin’s residence

President Trump said after a meeting with Israeli Prime Minister Benjamin Netanyahu that Hamas must disarm soon or "there will be hell to pay." He said the next phase of the Gaza peace plan could move forward quickly if Hamas disarms.

Washington

Trump warns "hell to pay" if Hamas doesn't disarm

CBC’s Kris Reyes highlights the biggest AI advancements in 2025 along with the continued calls to establish clear boundaries in an effort to prevent misuse.

DeepSeek and the biggest AI advancements in 2025

Russia accused Ukraine on Monday (December 29) of trying to attack President Vladimir Putin's residence in northern Russia, although it provided no evidence to back up an assertion that Kyiv dismissed as baseless and designed to undermine peace negotiations.

Russia claims Ukraine tried to attack Putin residence

Two helicopters collided above Hammonton, New Jersey, and one person has died, officials say. CBS News' Elaine Quijano reports.

Hammonton

Helicopters collide in New Jersey

U.S. President Donald Trump is meeting with Israeli Prime Minister Benjamin Netanyahu in Florida on Monday (December 29) as questions linger about the future of the U.S.-backed ceasefire in Gaza.

Palm Beach

Trump and Netanyahu meet in Florida to discuss Gaza ceasefire

British-Nigerian boxer Anthony Joshua was involved in a road accident on Monday in Makun, Ogun State, south-west Nigeria.

Makun

British boxer Anthony Joshua survives car crash that killed two others

In a new show of force, China has mobilized its navy, air force, and ground troops to simulate a blockade of the self-ruled island's key ports. The military drill comes on the heels of an $11bn US arms sale to Taipei.

China stages new military exercises around Taiwan

U.S. President Donald Trump said he believes both Ukrainian President Volodymyr Zelenskyy and Russian President Vladimir Putin truly want peace as he and Zelenskyy met in Florida. Some experts say Trump is 'delusional' if he truly thinks Putin wants peace.

Trump-Zelenskyy meeting ends with optimism but no deal

Although the U.S. security guarantees for Ukraine have been "100% agreed," they have a short expiration date, the Ukrainian president explained after revealing more details following his meeting with Trump on Sunday.

U.S. security guarantees for Ukraine set for 15 years, Zelenskyy says

China's military moved army, naval, air force and artillery units around Taiwan on December 29 for its "Justice Mission 2025" drills, as the island vowed to defend democracy and mobilized troops to rehearse repelling a potential Chinese attack.

China launches 'Justice Mission 2025' war games around Taiwan

President Trump spoke with Russian President Vladimir Putin by phone before meeting with Ukrainian President Volodymyr Zelenskyy in Florida on Sunday. Trump said he thinks both men are ready for peace.

Trump meets with Zelenskyy, insists Putin is ready for peace

Far-right politics have pushed further into the mainstream across much of Europe. Populist parties, even in opposition, are shaping national debates on migration and the economy. The trend reflects growing voter frustration over living costs, borders and political trust.

Berlin

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Ukrainian President Zelenskyy is set to discuss a new peace plan draft with U.S. President Trump in Florida on Sunday (December 28). However, fresh Russian attacks on Kyiv have left a third of the city without power, undermining local confidence.

Kyiv residents fear escalation amid Zelenskyy-Trump peace talks

A report has sought to catalogue some of the most significant extreme weather events of the year. UK charity Christian Aid found that heatwaves are pushing the limits of human adaptation, hurricanes and typhoons are breaking records, and droughts are devastating lives across the globe. It's all coming at a heavy financial cost.

Top 10 natural disasters cost over $120 billion in 2025, report says

Russia attacked Kyiv and other parts of Ukraine with hundreds of missiles and drones on Saturday, ahead of what President Volodymyr Zelenskiy said would be a crucial meeting with U.S. President Donald Trump to work out a plan to end nearly four years of war.

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French actor Brigitte Bardot has died aged 91, her foundation said on Sunday (December 28). She shot to international fame dancing the mambo barefoot in "And God Created Woman," her tousled hair and fierce energy radiating a sexual magnetism rarely before seen in mainstream cinema.

Saint-Tropez

Brigitte Bardot, France's 'legend of the century', has died

A ceasefire is now in place between Cambodia and Thailand after weeks of cross-border fighting. But with nearly a million civilians displaced and trust in short supply, the focus now is on whether the guns will stay silent.

Breakdown