Data Centers & Logistics Power the Commercial Real Estate Comeback

**SPEAKER_1** (0:00)
Take a closer look at the real estate sector with Henry Chin, the global head of research over at CBRE. Henry, great to have you on the show.
Now, at the start of the year, many investors were looking at real estate as potentially having lower rates, a potentially softer economy. We certainly didn't get that, but it has proven resilient. What has surprised you most about commercial real estate so far in 2026?

**Henry Chin** (0:23)
You know, I have to say, good afternoon, everyone. I have to say the biggest surprise for me is giving all the noises coming from geopolitical issues and then also the AI disruption for the economy.
The commercial real estate continues to perform so well. I can tell you that for the first half of 2026, just the US commercial real estate transaction volume was up by 25% compared to what we have seen in the same period in 2025 And also, this is the first time we have also seen that the transaction volume is well above the pre-COVID level. So from the transaction point of view, the market is definitely on the way to recover, which surprises us a lot. And from the fundamental point of view, from the leasing point of view, office, retail, industry, every single asset classes is showed a stronger bounce back. So nevertheless, I have to say, recovery seems to be quite nicely coming into the US commercial real estate market.

**SPEAKER_3** (1:21)
Henry, you and the team have just released your mid-year outlook. I'm wondering if the second half looks much like the first half, everything that you just laid out there, particularly given some of the challenges right now, obviously this straight-of-home situation dragging out for a lot longer than many had anticipated, and the potential for a Fed rate hike.

**Henry Chin** (1:44)
As of now, our house view is not potentially to have a rate hike. We do believe that Fed is going to hold the rate for the rest of this year.
But we also recognize that there's a geopolitical issue which potentially puts on downside risk for the inflation as well. What I want to highlight here is that based on what we are seeing, what we are looking at the forecast, I can quite honestly tell you, office leasing is coming back, and industrial leasing is also going to be the record year for 2026, translate into the capital markets. This year, we are forecasting 16 percent, one sixth percent of a transaction volume growth. So all of those together, we have to say that recover is well underway.

**SPEAKER_1** (2:31)
So Henry, if you say office could be the biggest surprise, and we're expecting some pretty significant growth, I think you just mentioned 16 percent there in terms of your investment sales volume.
As we look at it, I'm looking at the numbers here. Tech accounting for 21 percent of US office leasing in the first half, 64 percent of tech companies additionally saying they plan to expand their office footprint. We have all these conversations about AI trimming workforces and making workforces smaller. Is the AI boom actually help bringing more people back into the office setting?

**Henry Chin** (3:04)
I have to tell you, I think sometimes we're overlooking at the headline, which you always talk about, AI potentially is going to hurt the job market, is going to shrink in our workforces. That's not the thesis we are subscribing to. What we do believe is actually AI is going to help us to enhance the productivity.
I give you some facts.
Given all the noises of what we are seeing, we look at the banking sectors, the legal sectors, the insurance sectors and also technology sectors, among all of those major industries, in the first half of this year, all of them are signing bigger office spaces. So clearly, the media was talking about reduce the workforces in order to reduce the office spaces. It's not what we are seeing on the market. Every one of them are signing a double digit growth in terms of office spaces.

**SPEAKER_3** (4:03)
Henry, what about outside office spaces? What you're seeing across commercial real estate in other parts of the market? Because I was just having a fascinating chat with the folks over at Macquarie, who are in the business of private credit, asset management, infrastructure debt, and they've been talking about how things are booming on that front. I mean, the capital is flowing. I mean, particularly when you take a look at what's happening with utilities, the grid, the build out there.
But I'm also thinking about just generally data centers. We took a look at that ISM manufacturing PMI last week. It looks like things are firing on all cylinders, particularly if you look sort of net net compared to previous years. I mean, we're up. I mean, you mentioned productivity. Where are you seeing the most opportunity right now?