Real Estate Executives Preserve Capital as Sentiment Falls for Second Straight Year

Deloitte survey of 950 industry leaders shows confidence index dropped to 57.8 from 64.9 in 2026, even as 51% expect revenue growth above 5%.

By the Family Office Real Estate Daily Desk·Monday, November 2, 2026·2 min read

Editorial summary of reporting byDeloitte Our editorial standards →

The answer · checked against Deloitte

What does Deloitte's 2027 commercial real estate outlook say about executive sentiment and investment strategy?

Deloitte's survey of 950 commercial real estate industry leaders shows the sentiment index fell to 57.8 out of 100 for 2027, down from 64.9 the prior year and 68.3 in 2025, marking the second consecutive annual decline. Despite the caution, 51% of respondents still expect revenue growth above 5%, and nearly 80% plan to upgrade or reposition existing assets over the next 12 to 18 months.

Key facts

Deloitte's survey of 950 commercial real estate industry leaders found the sentiment index fell to 57.8 out of 100 for 2027, down from 64.9 in 2026 and 68.3 in 2025, according to the Deloitte 2027 Commercial Real Estate Outlook.
Fifty-one percent of respondents in Deloitte's survey of 950 CRE industry leaders still expect their revenues to grow more than 5% in the upcoming year.
Cross-border commercial real estate capital was up 18% in the first quarter of 2026 compared to the same period the prior year, according to the Deloitte 2027 Commercial Real Estate Outlook.
The United States is the top geographic investment target outside respondents' home countries for 28% of survey respondents, up from 16% the prior year, according to Deloitte's survey.
Over 60% of executives surveyed by Deloitte plan to shift capital to jurisdictions or assets with stronger tax incentives, and more than 90% say tax strategy will be more central or is already central to their investment decisions.
Digital economy and debt strategies together accounted for more than two-thirds of capital raised in 2025, according to the Deloitte 2027 Commercial Real Estate Outlook.

Real Estate Executives Preserve Capital as Sentiment Falls for Second Straight Year — Image: editorial illustration · Story sourced from Deloitte

Commercial real estate executives are preserving capital and growing more cautious about market conditions, even as many anticipate strong revenue growth in the year ahead. A Deloitte survey of 950 industry leaders found the sentiment index fell to 57.8 out of 100 in 2027, down from 64.9 in 2026 and 68.3 in 2025. Respondents plan to tighten spending in areas including office space and talent management, and they expect slower rent growth and elevated vacancies.

Despite the drop in sentiment, this year posted one of the strongest readings on record for expected revenue growth among respondents. Forty-one percent of executives surveyed expect their revenue to grow between 5% and 10% in the upcoming year, a higher proportion than in 2026. Those growth expectations pushed the revenue sentiment index to 67.9, just below its 2025 record of 70.3.

The industry is expected to enter 2027 with more capital in motion but less certainty about where to deploy it. That uncertainty reflects an increasingly uneven economic landscape, as divergent growth, persistent inflation, uncertain interest rates and currency volatility may be widening performance gaps across regions, property types and assets. Respondents cited the cost of capital, capital availability and elevated interest rates as their top three macroeconomic concerns for the next 12 to 18 months.

Nearly 80% of respondents expect to update or reposition existing assets over the next 12 to 18 months, according to the survey. The focus on upgrading existing properties rather than new acquisitions suggests executives are concentrating capital on portfolios they already own. Deloitte said firms well-positioned to outperform may be those that act with the greatest discipline, upgrading where demand supports it and selling assets with limited prospects for recovery.

More than 60% of executives surveyed plan to shift capital to jurisdictions or assets with stronger tax incentives. Over 90% say tax strategy will be more central or is already central to their investment decisions. The firm said leaders are deciding asset by asset and capability by capability where investment makes the most sense, bringing tax into investment decisions earlier than in prior cycles.

Headline sentiment rarely captures the bid-ask gap that family offices actually live in, family office advisor Jaf Glazer has observed.

Two out of three commercial real estate executives say AI and data fluency will be among the most important capabilities for future leaders. While 72% of respondents have completed preliminary data mapping and source verification for their AI systems, fewer than half have implemented more advanced process and security controls. Deloitte said the firms likely to outperform will govern AI before scaling it and build the leadership capabilities the next cycle will require.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

The 7.1-point sentiment decline over two years against flat revenue expectations creates a valuation puzzle family offices can exploit. If executives holding assets expect 5% to 10% revenue growth but are pricing risk 11% higher than two years ago, the implied cap-rate spread has widened materially. That gap favours direct acquisition from operators who need liquidity but cannot reconcile their own underwriting with the bid they are receiving from institutional buyers. A separate-account structure with a two-year lock and a performance kicker tied to revenue rather than appreciation may clear where a blind-pool commitment will not.

The survey shows 80% of respondents repositioning existing assets rather than acquiring new ones. That tells family offices where the competition is not. Sponsors pursuing value-add deals inside their own portfolios will have less bandwidth and less capital for opportunistic acquisitions outside them. A co-GP commitment to a sponsor platform executing programmatic upgrades—especially one concentrating capital in a single metro or property type—offers better visibility and less execution risk than a diversified fund chasing distress across markets the GP does not know.

Tax strategy is moving to the front of the underwriting process, with more than 90% of respondents saying it is central or becoming central to investment decisions. Family offices structuring direct deals should model state and local incentives at the LOI stage, not after the purchase agreement is signed. Opportunity Zone equity, historic tax credits and property-tax abatements can shift returns by 150 to 300 basis points over a five-year hold. If a sponsor has not priced those into the preferred return or the promote, the structure is leaving money on the table that belongs to the capital partner.

Fewer than half of survey respondents have implemented advanced AI process and security controls, even as two-thirds say data fluency will define the next generation of leaders. Family offices should avoid platforms that have scaled AI without governance and favour managers who can demonstrate version control, source verification and human override protocols. The risk is not that AI will fail to add value—it is that a manager will rely on a model that drifts from its training data and misprices a portfolio decision before anyone notices.

Questions this story answers

01How has commercial real estate executive sentiment changed heading into 2027?

Deloitte's survey of 950 CRE industry leaders shows the sentiment index declined for the second consecutive year, falling to 57.8 out of 100 for 2027, down from 64.9 in 2026 and 68.3 in 2025. Respondents plan to tighten spending in areas like office space and talent management and anticipate slower rent growth and elevated vacancies.

02Are commercial real estate executives still expecting revenue growth despite the sentiment drop?

Yes. Despite the declining sentiment index, 51% of respondents in Deloitte's survey of 950 CRE industry leaders still expect revenues to grow more than 5%. Forty-one percent expect revenue growth between 5% and 10%, a higher proportion than in 2026, pushing the revenue sentiment index to 67.9, just below its 2025 record of 70.3.

03Where are global CRE investors targeting capital outside their home countries?

Deloitte's survey of 950 CRE industry leaders found the top geographic targets for investment outside respondents' own countries are the United States, United Kingdom, and India. The United States is the top target for 28% of respondents, up from 16% the prior year. Transaction activity in continental Europe was down 10% year over year for the second quarter of 2026.

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