Cleared for Takeoff: A New Flight Path for Real Estate

By David Stein­bach, Glob­al Chief Invest­ment Offi­cer at Hines

After years of ongo­ing tur­bu­lence punc­tu­at­ed by repric­ing, inter­est rate fluc­tu­a­tions, and recal­i­bra­tions, the glob­al com­mer­cial real estate sec­tor appears to have found a sta­ble altitude—and in our opin­ion is now primed to begin its next ascent.

But we don’t expect an imme­di­ate shift. Instead, we believe we’re in for a steady climb that slow­ly unfolds across pock­ets of oppor­tu­ni­ty that will require skill and dis­ci­pline to suc­cess­ful­ly iden­ti­fy and nav­i­gate. Much like trained pilots who care­ful­ly man­age speed and angle—investors who stay mea­sured, inten­tion­al, and strate­gic will like­ly be the ones who ascend. 

One of the most promi­nent shifts shap­ing this flight path is the new geog­ra­phy of cap­i­tal. Deglob­al­iza­tion is no longer a the­o­ret­i­cal debate; it’s a core design prin­ci­ple. Cap­i­tal that once flowed freely across bor­ders is becom­ing increas­ing­ly local­ized, dri­ven by geopo­lit­i­cal real­i­ties, reg­u­la­to­ry con­straints, and a renewed pre­mi­um on prox­im­i­ty. In the year ahead, investors
will need to under­stand not just a coun­try or a region, but the hyper­local dynam­ics of neigh­bor­hoods, dis­tricts, and micro-markets. 

At the same time, con­ver­gence is cre­at­ing entire­ly new flight pat­terns. The inter­sec­tions of liv­ing, work­ing, logis­tics, mobil­i­ty, and tech­nol­o­gy have blurred across tra­di­tion­al prop­er­ty lines. Mul­ti­fam­i­ly, indus­tri­al, mixed-use, and spe­cial­ized infra­struc­ture like data cen­ters are con­verg­ing into inte­grat­ed plat­forms that we believe sup­port mod­ern eco­nom­ic behav­ior. We believe that investors who rec­og­nize these connections—and design around them—will like­ly unlock oppor­tu­ni­ty that oth­ers may miss. 

As the recov­ery con­tin­ues to take shape in the months ahead, we’re excit­ed about the oppor­tu­ni­ties form­ing on the hori­zon to put fresh cap­i­tal to work. From a bird’s eye view, our pri­or­i­ty sec­tors and high-con­vic­tion themes for the year ahead include: 

Liv­ing: Data from Hines Research shows that, par­tic­u­lar­ly in devel­oped economies, around 80% of house­holds showed momen­tum for rent­ing over buy­ing in the face of a glob­al hous­ing short­age and afford­abil­i­ty cri­sis.¹ This under­scores our belief that the glob­al liv­ing sec­tor should con­tin­ue to be a strong play in 2026.

Indus­tri­al: Our recent research also dis­cov­ered that new cor­ri­dors of demand have formed. Changes in trade pol­i­cy have fueled a rise in intra-region­al trade as inter-region­al (i.e., glob­al) trade con­tin­ued to down­shift in the face of ongo­ing deglob­al­iza­tion. Mean­while, the indus­tri­al sec­tor (par­tic­u­lar­ly ware­hous­es) appears to be con­verg­ing into oth­er prop­er­ty types, such as retail and data cen­ters, poten­tial­ly set­ting the stage for future growth.²

Retail: Gen­er­al­ly speak­ing, the glob­al retail sec­tor has ​“right­sized.” For exam­ple, across the four major prop­er­ty types in NCREIF, the U.S. retail sec­tor ranked first in total returns in each of the past 11 quar­ters through Q3 2025.³ How­ev­er, tar­iffs have made the out­look for retail less cer­tain as con­sumers pull back and sup­ply chains adjust. U.S. Office Cred­it: There are region­al vari­ances to con­sid­er, but dis­lo­ca­tion in the U.S. office cap­i­tal mar­kets has cre­at­ed oppor­tu­ni­ties across the cap­i­tal stack—including equity—that we’re close­ly track­ing and act­ing upon.⁴ 

Alter­na­tive Sec­tors: No 2026 Out­look is com­plete with­out men­tion­ing the mete­oric rise of AI and the data cen­ters behind it. We’re espe­cial­ly inter­est­ed in the pow­ered land oppor­tu­ni­ty in this quick­ly evolv­ing land­scape. Hines Research esti­mates that 40,000 acres of pow­ered land—almost 2 bil­lion square feet—will be need­ed to sup­port cur­rent pro­jec­tions for data cen­ter growth over the next five years. Europe’s less sat­u­rat­ed mar­ket seems espe­cial­ly poised for growth.⁵ Mean­while, Pur­pose-Built Stu­dent Accom­mo­da­tion (PBSA) in Europe is also a key area of focus.⁶ 

Preparing to Go Wheels Up

We believe the glob­al econ­o­my is at a turn­ing point, dri­ven by struc­tur­al shifts reshap­ing the way cap­i­tal flows and invest­ments are made. And much remains up in the air: for instance, at time of this writ­ing, U.S. tar­iffs are under legal scruti­ny, and the recent U.S. gov­ern­ment shut­down has delayed some crit­i­cal pieces of data, and new con­flicts have arisen just days into the new year.

How­ev­er, amid this chang­ing envi­ron­ment, we believe that real estate stands apart as a high-con­vic­tion invest­ment. In fact, we believe that 2025 may prove to be the year that real estate qui­et­ly bottomed—and 2026 could be the year that cap­i­tal wakes up to it. These shifts will like­ly reward those who already have deep oper­a­tional plat­forms in place, not those who are just arriving.

With this in mind, we embark on 2026 with strong con­fi­dence that our glob­al­ly aligned plat­form, deeply estab­lished on-the-ground exe­cu­tion capa­bil­i­ties, strong cap­i­tal posi­tion, and mar­ket-lead­ing pro­pri­etary research insights will suc­cess­ful­ly guide us as we ascend into the year ahead—and beyond. To put it sim­ply: We’re primed and ready for takeoff.