Deloitte Report Offers CRE M&A 2026 Outlook

Barchart·04/17/2026 00:06:03

Mention “mergers and acquisitions” in the commercial real estate industry, and what comes to mind are massive portfolio sales from one institutional buyer to another.

However, “CRE M&A is broader than just property deals,” Jonathan Keith, Deloitte & Touche’s managing director, Real Estate M&A and Restructuring Services leader, told Connect CRE. “It includes corporate acquisitions of equity or mortgage REITS, real estate services firms, diversified property platforms and digital-infrastructure-related operating businesses.”

Additionally, M&As have shifted in focus over the past decade, morphing from asset collecting and financial engineering to differentiation and operational capabilities.

“Said another way, ten years ago, the question was ‘how many assets do you own?’” Keith said. “Now it’s increasingly ‘how good is your operating system?’”

Looking Backward

One headline-making acquisition in 2025 was Blackstone’s $4 billion acquisition of Retail Opportunity Investment Corp.’s grocery-anchored retail centers.

Mergers and acquisitions in 2025 also included:

• Redfin’s buy of Rocket Companies

• Credit company Rithm Capital Corp.’s takeover of Paramount Group Inc.

• Compass Inc.’s acquisition of Anywhere Real Estate Inc.

But according to Deloitte’s “2026 Commercial Real Estate M&A Outlook:”

• CRE M&A value declined 57% year over year, from $206.7 billion in 2024 to $88.7 billion in 2025

• The deal count dropped 74%, from 3,286 in 2024 to 846 in 2025

Keith said the decrease was due to higher-for-longer interest rates driven by inflation, the struggle between buyers and sellers over valuation gaps, and delays in deals caused by unclear underwriting and exit assumptions.

Furthermore, “the market skewed toward distressed and recap-driven deals instead of growth-oriented acquisitions,” he added.

Looking Ahead

The Deloitte report listed M&A trends to watch for the remainder of this year, including the following.

Office: On the radar?

The Deloitte report explained that U.S. office utilization is improving, partially due to RTO trends. Meanwhile, investors are drawn to newer buildings with higher occupancies.

However, as has been the case over the past few years, bifurcation remains between Class A trophy properties and Class B/C vintage buildings, with the latter continuing to struggle.

According to Keith, deal activity could be deal- and market-specific, versus an overall market rebound

“The bifurcation means one buyer cohort may chase prime stabilized assets, while another may target distressed buildings only if conversion economics or public incentives are credible,” he added.

Data centers: Changes in acquisitions

Larger data center platforms have gone private or been recapitalized, while there remains intense competition for stable assets, the report said. All of this, plus rising development and acquisition costs, power, permitting and community acceptance, could drive more joint ventures and development partnerships rather than full takeovers.

“Practically, partnerships make sense because they let investors share capital, land development, power procurement and hyperscaler customer-concentration risks,” Keith commented. “They also fit in a market where operators increasingly need utility or generation and technology partners.”

Services: Scaling up

The rest of the year could see more consolidation between investment managers and service providers. The report noted that larger players could “selectively acquire specialized operators or nice strategies to deepen expertise in targeted sectors.”

Additionally, as demand for vertical services continues, consolidation could be driven by integration and asset growth. For example, “CBRE’s purchase of Pearce signals continued interest in expanding operating capabilities,” the report added.

Next-Cycle Preparation

The report explained that preparation over prediction will be a factor in a successful M&A. Keith explained that financing stress tests, technology readiness, integration planning and a definite exit strategy are essential for driving deals through.

Furthermore, “CRE M&A market winners will be the firms that combine disciplined underwriting with operational execution, local-market pattern recognition and structure flexibility,” he added.

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