The commercial real estate market is experiencing a fundamental shift. After years of dislocation, we're seeing signs of stabilization, but this recovery looks different from past cycles. In a recent Peachtree Point of View conversation, Peachtree Group CEO Greg Friedman spoke with Aaron Jodka, Director of Research for U.S. Capital Markets at Colliers. In this episode, Aaron offered valuable insights into where the market is heading and what it means for investors.

A Market in Rebalancing

Aaron describes the current environment as one of rebalancing rather than rapid recovery. "I feel that the state of the commercial real estate markets are in a state of rebalancing, where we're seeing improving signs of fundamentals across most asset classes," he explains. Unlike the post-financial crisis period, when aggressive Fed intervention created a V-shaped recovery, today's environment is characterized by measured growth without the same liquidity backstop.

This matters for investors who may be expecting quick value appreciation. "It shouldn't be a V shape," Aaron cautions. "I wouldn't expect that all of a sudden we're off 10%, 15% value growth in a short period of time. It's going to be a slow and steady climb because the environment and backdrop is different today than it was coming out of the global financial crisis."

The Private Credit Opportunity

For investors seeking current income and downside protection, private credit continues to offer compelling risk-adjusted returns. Aaron notes that private credit has been "one of the driving forces in commercial real estate for the last 15 years, if not longer," filling the void left by regulated banks pulling back from real estate lending.

The sustainability of private credit as an investment strategy is backed by structural advantages. Real estate-backed loans provide stability that corporate debt cannot match, with values that don't adjust overnight and assets that generate consistent cash flow. Insurance companies have significantly increased their allocations to private credit precisely because it aligns with their long-term liabilities and income requirements.

When asked about the relative attractiveness of debt versus equity, Aaron's response should interest investors evaluating their allocations: "I think we're still in a period where private credit is still on a risk reward benefit outweighing equity. But I think that pendulum is starting to swing where that equity investment is starting to look really attractive."

Sector-Specific Opportunities

Not all commercial real estate sectors are positioned equally. Aaron identifies retail properties as particularly compelling: "I really like retail at the moment. We're not building very much across this country." Limited new supply combined with retailers adapting to omnichannel strategies creates favorable supply-demand dynamics.

He also sees generational opportunities in select office assets, despite negative headlines. "True main and main locations, trophy assets are doing very well," he notes, though location and basis are critical factors. Industrial and multifamily fundamentals remain sound long-term, with supply concerns diminishing. In hospitality, the lack of new construction paired with demand from affluent consumers creates attractive entry points for experienced operators.

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Key Takeaways

• Recovery Will Be Gradual: Without aggressive Fed intervention, commercial real estate values will appreciate more slowly than in previous cycles, creating extended windows for strategic acquisitions.
• Private Credit Remains Compelling: For investors prioritizing income and principal protection, private credit offers superior risk-adjusted returns in the current environment, though equity is becoming more attractive.
• Sector Selection Matters: Retail, select office properties and hospitality assets with limited new supply offer compelling risk-reward profiles for 2026 and beyond.

Investors who understand market fundamentals, maintain flexibility in their capital deployment and partner with experienced operators will be best positioned to capitalize on emerging opportunities.

Listen to the full conversation on the Peachtree Point of View podcast to hear more insights from Aaron Jodka on commercial real estate market dynamics, the 10-year treasury outlook and what data points matter most heading into 2026.

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