LaSalle's ISA Outlook 2026: Americas Real Estate Poised to Break its Groundhog Day Cycle

• While the beginning of 2026 feels similar to the starts of 2025 and 2024 – the real estate cycle is finally set to rebound.
• Economic sentiment was volatile in 2025, but actual economic performance has been more stable.
• Most notable difference in real estate markets is the improvement in capital markets.

CHICAGO, Dec. 4, 2025 /PRNewswire/ -- The Americas real estate market is showing early signs of entering a new cycle in 2026, supported by stabilizing valuations, improving debt market liquidity and a sharp pullback in new development, according to the North America chapter of the Insights, Strategy and Analysis (ISA) Outlook 2026 report published by global real estate manager LaSalle Investment Management ("LaSalle").

While 2025 often felt like a repeat of the year before, the ISA Outlook notes that several key dynamics are shifting. Economic performance across the US and Canada proved steadier than sentiment suggested, interest rate cuts arrived late in the year, and both institutional investors and lenders are beginning to re-engage after a prolonged slowdown. Combined with subdued construction pipelines and a clearer link between transacted prices and valuations, LaSalle's research sees the foundations of a more supportive environment for real estate investment on the horizon.

While some elements of the current cycle may feel familiar, the report emphasizes that past patterns are not exact predictors of what's to come. This year's ISA report offers insights to help investors navigate today's environment and prepare for the next phase of growth in US and Canadian real estate markets, which will be shaped by new macro forces, evolving demographic trends and uneven sector performance.

Economic landscape: below-trend growth but renewed stability

The US is positioned to continue a period of slightly below trend growth in 2026 but avoid an outright recession. Economic performance as measured by job growth and consumer spending was steady in the US, while Canada has faced greater economic headwinds stemming in part from trade uncertainty.

Capital markets: debt recovers first, equity to follow

LaSalle's ISA Outlook 2026 notes that debt capital markets strengthened noticeably in 2025. CMBS and CLO issuance improved, private debt funds saw strong inflows, and refinancing activity helped keep liquidity moving even as transaction volumes remained below long-term averages. Borrowing spreads tightened through the year, signaling renewed confidence.

Equity capital flows remain muted but show early signs of a turning point. The denominator effect has faded for many institutional investors, appraisal metrics have stabilized, and capital raised in previous vintages remains available for deployment. LaSalle's North America chapter of the ISA Outlook indicates that transaction volume is expected to pick up gradually in 2026 and 2027 as borrowing costs decline and confidence improves. A relatively weaker Canadian dollar is also expected to attract more foreign capital into Canadian real estate.

Sector outlook: supply constraints define the next phase of the cycle

Limited supply is expected to be the strongest cross-sector theme heading into 2026. Fewer new development starts - driven by higher financing costs, tighter bank lending and declining valuations - position most major property types for improving occupancy and rental dynamics. LaSalle's North America chapter of the ISA Outlook identifies several key sector highlights:

• Apartments: US apartment fundamentals surprised positively in 2025, and long-term data continues to show income growth outpacing inflation. LaSalle's value assessment reflects these persistent structural strengths. In Canada, markets remain supported by demographic demand, with newer units in Ontario benefiting from exemption from rent control.
• Industrial: Industrial demand is expected to recover as tariff-related uncertainty eases. With availability rates projected to decline and acquisition pricing often at or below replacement cost, industrial represents one of LaSalle's most attractive relative-value opportunities for 2026.
• Retail: Retail performance varies widely across markets and formats. While sector-level value screens as challenged, pockets of opportunity exist, particularly in grocery-anchored centers, certain Canadian high-street corridors and US power centers, where rental growth potential is underappreciated.
• Office: Office fundamentals stabilized in 2025, but LaSalle remains cautious about relative value due to capital expenditure burdens and underpriced income drag. While opportunistic investments may emerge, broad-based recovery is not yet evident.
• Specialty sectors: Affordable housing, senior housing and industrial outdoor storage present some of the strongest niche opportunities. These sectors benefit from structural drivers: stable demand, demographic shifts or low capex requirements, and compelling risk-adjusted return potential.

Brian Klinksiek, Global Head of Research and Strategy at LaSalle, said: "Despite the fits and starts of 2025, the foundations for a new real estate cycle in the Americas are taking shape. Supply pipelines have collapsed, debt markets have reopened, and valuations now align more closely with transacted pricing. These shifts create early-cycle opportunities, though investors should expect uneven performance across sectors and markets."

Richard Kleinman, LaSalle's Americas Head of Research and Strategy, added: "We see 2026 as the start of a more constructive environment for investors who can be selective. Industrial and apartments remain well positioned, while retail and specialty sectors offer targeted opportunities where income growth is mispriced. As borrowing costs fall and capital markets normalize, we expect transaction activity to build gradually and strategic differentiation to matter more than ever."

Chris Langstaff, Head of Research and Strategy for Canada at LaSalle, commented: "Canada's real estate landscape is entering 2026 with both challenges and advantages. Economic growth has been slower and trade frictions weighed more heavily here than in the US, but stabilizing inflation, falling interest rates and steady long-term immigration trends are setting the stage for improvement. Limited new supply across most asset classes is creating a stronger backdrop for fundamentals, particularly in retail and industrial. As confidence returns and foreign capital responds to a favorable currency environment, Canadian markets are positioned for greater momentum in the years ahead."

About LaSalle Investment Management | Investing Today. For Tomorrow.

LaSalle Investment Management, a subsidiary of JLL, is a globally integrated, diverse real estate investment manager. On a global basis, LaSalle manages US$88.5 billion of assets in private and public real estate equity and debt investments as of Q2 2025. LaSalle's client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a diverse range of investment vehicles, including separate accounts, open- and closed-end funds, public securities and entity-level investments.

For more information, please visit www.lasalle.com and LinkedIn.

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SOURCE LaSalle Investment Management