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Deloitte’s latest Commercial Real Estate M&A Outlook suggests that dealmaking across the sector has moved well beyond traditional property trades, encompassing corporate acquisitions of equity and mortgage REITs, real estate services platforms, diversified operating companies and digital infrastructure businesses. Jonathan Keith, managing director and Real Estate M&A and Restructuring Services leader at Deloitte & Touche, highlighted that strategic focus has shifted over the past decade from sheer asset accumulation toward differentiation and operational execution.
Keith noted that where investors once emphasized the question of how many assets an organization controlled, they now increasingly concentrate on the strength of operating systems and capabilities. This transition has unfolded against a backdrop of sharply reduced M&A volumes. According to the Deloitte report, overall CRE M&A value fell 57% year over year, from $206.7 billion in 2024 to $88.7 billion in 2025, while the number of transactions declined 74%, from 3,286 to 846.
The report attributes this pullback to higher-for-longer interest rates driven by inflation, persistent gaps between buyer and seller valuations, and delays tied to uncertainty around underwriting and exit assumptions. Keith added that the deal mix has skewed toward distressed situations and recapitalizations, with fewer growth-oriented acquisitions coming to market. Notable activity in 2025 included Blackstone’s $4 billion acquisition of Retail Opportunity Investment Corp.’s grocery-anchored retail centers, Redfin’s purchase of Rocket Companies, Rithm Capital Corp.’s takeover of Paramount Group Inc., and Compass Inc.’s acquisition of Anywhere Real Estate Inc.
Looking ahead, the Deloitte report outlines sector-specific themes likely to shape the balance of 2026. In office, U.S. utilization is improving as return-to-office trends continue, and investors are gravitating toward newer, higher-occupancy assets. At the same time, the gap between Class A trophy properties and older Class B and C buildings remains pronounced, with the latter facing ongoing challenges. Keith indicated that office deal activity is likely to be highly selective and market-specific, rather than signaling a broad-based recovery, with some buyers focusing on stabilized prime assets and others only pursuing distressed properties where conversion economics or public incentives appear viable.
In data centers, the report notes that many large platforms have either gone private or been recapitalized, while competition for stabilized assets remains intense. Rising development and acquisition costs, together with power constraints, permitting processes and local community considerations, are expected to encourage more joint ventures and development partnerships instead of full takeovers. Keith said these structures help investors share capital requirements, land and power risks, and hyperscaler concentration, while aligning with a landscape in which operators increasingly collaborate with utility, generation and technology partners.
The report also points to continued consolidation among investment managers and service providers. Larger firms may selectively acquire specialized operators or niche strategies to deepen sector expertise, with vertical integration and asset growth supporting further M&A. As one example, the report cites CBRE’s purchase of Pearce as evidence of ongoing interest in expanding operating capabilities.
Deloitte emphasizes that preparation, rather than prediction, will be critical for participants aiming to capitalize on the next M&A cycle. Keith underscored the importance of financing stress tests, technology readiness, robust integration planning and clear exit strategies to ensure transactions can close and perform as underwritten. He added that firms most likely to succeed in the current environment will combine disciplined underwriting with strong operational execution, localized market insight and flexible transaction structuring.
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