Key Takeaways
- • MetLife Investment Management forecasts U.S. commercial real estate gross unleveraged total returns of 5.0% in 2026 and 6.4% in 2027, according to its "U.S. Commercial Real Estate Chartbook — H2 2026."
- • MetLife expects the 2027 improvement to be driven by declining construction activity, which limits new supply and supports occupancy and income growth across property sectors.
- • Senior housing, retail net lease, manufactured housing, malls and medical office are projected to be the top-performing sectors over the next two years.
Summary
U.S. commercial real estate returns are expected to improve in 2027 as declining construction activity supports occupancy and income growth, according to MetLife Investment Management's "U.S. Commercial Real Estate Chartbook — H2 2026," as reported by Institutional Real Estate, Inc. The firm forecasts gross unleveraged total returns of 5 percent in 2026, rising to 6.4 percent in 2027.
MetLife expects income growth to strengthen across property sectors over the next two years. The firm attributes this outlook to shrinking construction pipelines, which limit new supply and allow existing properties to capture stronger demand.
By sector, MetLife projects senior housing, retail net lease, manufactured housing, malls and medical office properties to be the top performers. The forecast positions these segments as the primary sources of relative outperformance within the commercial real estate market.
The outlook is based on MetLife's semiannual chartbook and reflects the firm's own projections rather than realized results. Investors should weigh the forecast against the assumptions underlying supply trends and occupancy recovery.
MetLife expects income growth to strengthen across property sectors over the next two years. The firm attributes this outlook to shrinking construction pipelines, which limit new supply and allow existing properties to capture stronger demand.
By sector, MetLife projects senior housing, retail net lease, manufactured housing, malls and medical office properties to be the top performers. The forecast positions these segments as the primary sources of relative outperformance within the commercial real estate market.
The outlook is based on MetLife's semiannual chartbook and reflects the firm's own projections rather than realized results. Investors should weigh the forecast against the assumptions underlying supply trends and occupancy recovery.
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