As the second quarter of 2026 commences, commercial brokers are advised to prioritize the industrial sector for deal-building. While multifamily properties continue to demonstrate strong performance, the industrial segment is revealing increasing momentum, building it a promising area for investment returns, as revealed by Bar Mor, founder and CEO of Agora.
Mor, whose firm recently published a report on commercial real estate fundraising, highlighted industrial properties as a key focus. He noted that while it might not always garner significant media attention, the sector’s returns are steadily building. This offers a more consistent growth trajectory compared to retail, which, despite revealing improvement, remains highly depconcludeent on specific market conditions and execution strategies.
In 2025, multifamily properties dominated capital raising, securing 48.61% of all capital and generating 40.31% of total investment returns, according to Agora’s report. Data centers also continue to attract considerable interest, despite localized resistance to their development nationwide.
The current environment of higher interest rates introduces a ‘filtering effect’ within the commercial real estate market, as explained by Mor. Strong, well-structured deals are still being finalized, while weaker proposals often require additional effort or are pushed aside. This dynamic creates a more selective market where only the most viable projects secure financing.
Refinancing activities within the commercial sector are particularly sensitive to these rate increases. Given the substantial values involved in commercial transactions, elevated rates can complicate the feasibility of many refinancing deals. Nonetheless, Mor emphasized that the market remains active, albeit with a heightened sense of selectivity.
Xander Snyder, a senior commercial real estate economist for First American, suggested that the full impact of higher interest rates on the commercial sector may not yet be entirely clear. He pointed out that while rate volatility increased significantly in March 2026, comprehensive data on its effects are still emerging. January and February saw a slight increase in volatility, with commercial transaction volume down approximately 4% compared to the same period in 2025.
Snyder cautioned against concluding that rate volatility was the primary caapply for the slowdown in activity, noting that the evidence is not yet conclusive. He also expressed skepticism that such volatility would manifest so quickly in commercial real estate sales figures.
Beyond industrial, the infrastructure sector is also poised for growth in 2026, likely surpassing its 2025 performance. Despite raising a mere 0.13% of total capital in Agora’s previous report, demand spurred by advancements in AI is expected to drive significant investment into data centers and power infrastructure this year. Brokers are encouraged to consider the industrial segment as a “sleeper pick” for strong returns, while approaching retail deals with greater discernment, focutilizing on specific opportunities rather than broad market plays.
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