BREAKPOINT ADVISORS INSIGHTS
Big Theme: Uncertainty exists — but it isn’t always a deal breaker.
Look Back - Q4 2025
Getting right to it, here’s what we personally witnessed in the fourth quarter:
-
Office values remain under pressure for the most part, with some exceptions for best of the best assets.
-
Life science values continue to slip due to a supply-demand imbalance and limited investor demand for this property type.
-
Multifamily values were slightly up to slightly down, or generally flat on average. While new supply is tapering, rent growth is slow to negative in all but a few notable markets.
-
Industrial was a mixed bag, with values most sensitive to tenant-specific movement and a tempering in rents and rent growth in select markets.
-
Retail continues to perform well, and investors are taking notice.
Also, we were pretty jazzed to see the Expanded NCREIF ODCE Valuation Trends report with third quarter information (released November 20), which provides valuation data points for not just five primary property types but now property subtypes as well. While not all ODCE funds participate, nor is every data point provided by each contributing fund, this is a big step towards improving transparency. Breakpoint more heavily considers the direction of the trends than the specific data points themselves, and it’s a bit stale for our forward looking valuations, but it’s a worthy initiative and a useful tool. We look forward to the time when the data is available by subtype AND by major metro area – and hope all ODCE funds participate.
Look Ahead - Q1 2026
As we prepare for the new year and the next quarter, I perused a sampling of our clients’ “house positions.” Here are some useful links and tidbits I picked up:
-
Nuveen notes in a recent investment outlook, after two years of declines, global private real estate has posted positive returns for five consecutive quarters. Rebounding prices, rising transaction volumes, and sharply reduced construction activity have helped. Nuveen’s favored property sectors include health care, neighborhood retail, and senior housing.
-
PGIM’s 2026 Real Estate Outlooks is a must-read, particularly the U.S. report. The publication is chock full of solid insights such as “Uncertainty is prolonging, rather than reversing, the early phase of the real estate recovery cycle.” Like Nuveen, PGIM forecasts that real estate values will continue to rise. While consumers are showing some signs of strain, broader economic and capital markets indicators remain favorable for both tenant and investor real estate demand, according to PGIM. Investment opportunities in the new year for PGIM include senior housing, BTR, e-commerce driven industrial, data centers, necessity-based retail, and even high-end office stock.
-
Lastly, MetLife has published “A New Dawn in Real Estate: 2026 U.S. Commercial Real Estate Outlook,” wherein MetLife contends that the disparity in income growth and a shifting labor market are reshaping the landscape for capital flows and asset valuations. Yet opportunities do exist, with MetLife expecting the following property types to perform best in 2026: senior housing, infill warehouses, medical office, and net-leased retail.
So, what’s the Breakpoint house position? We do our absolute best to reflect the market; we don’t set the market. Internally we chatter about a possible data center bubble and the impact of data center energy requirements on utility costs; we muse about Mamdani, the Rent Guidelines Board, and multifamily rent growth in NYC; we tune into unemployment and CPI releases; and we talk to everyone. Like most of us in the CRE industry, we remain cautiously optimistic.
What We’re Up To in 1Q
NCREIF Spring Conference
Breakpoint will be participating in the Valuation Committee meetings at the upcoming NCREIF conference at the Fairmont Scottsdale Princess, March 16-19. Hope to see you there!
NCREIF Valuation Service Provider Subcommittee (VSPS)
For those on the subcommittee, save the date for our next call on January 29, 2026, at 2:00pm ET. Agenda TBD but will likely include property sector overviews.
As we wrap 4Q and kick off 1Q, we’re here to serve your needs. We appraise all core property types as well as data centers, cold storage, self-storage, senior living, and more.
This newsletter reflects the personal opinions of the author and is provided for general informational purposes only. It is not intended as legal, financial, or professional advice.
READ MORE INSIGHTS:
Q4 2025 EDITION
Big Theme – Markets continue to price and transact through the noise.