Our take on the news that matters in commercial real estate and property data intelligence.
The Weekly LightBox Perspective
Last week, Wall Street climbed to new highs, CRE stocks pulled back, and retail sales stalled. It was another week where the headlines didn’t quite align with the steady momentum and cautious optimism we’re seeing across commercial real estate. The Mortgage Bankers Association released its latest forecast, calling for double-digit CRE lending growth in the near term, followed by a potential contraction as refinancing activity tapers. On the ground, recent deals underscore strength in markets like Chicago, where multifamily is outperforming supply-heavy Sunbelt metros. The mood remains cautiously optimistic, but are storm clouds beginning to gather?
TOP STORY: When the Olympics Come to Town: The CRE Angle
The USA team is currently competing in the Winter Olympics in Milan-Cortina and has earned 19 medals so far, including 6 gold, 8 silver, and 5 bronze. While the Games are still unfolding and more podium finishes could be ahead, attention is already beginning to shift to the 2028 Summer Olympics in Los Angeles.
Hosting the Olympics has paid off for some cities and burdened others with white-elephant venues after the event and massive cost overruns. Los Angeles is betting that a disciplined “no-build” strategy based on leveraging existing stadiums while accelerating billions in transportation and infrastructure upgrades will make the 2028 Olympics a catalyst for its commercial real estate market. Major transit projects, hotel expansions, and mixed-use developments are already reshaping key corridors years in advance of the Summer 2028 Games. Yet risks remain: the city faces budget strain, wildfire recovery costs, and the historic tendency for Olympic budgets to balloon.
LightBox Take: Our ScoreKeeper data, which tracks environmental site assessment activity as an early indicator of CRE investment, shows the Los Angeles metro grew 11% year over year in Q4, making it the third-largest Phase I market in the U.S. That forward-looking signal is reinforced by transaction activity. LightBox’s Transaction Tracker logged 77 deals in the City of Los Angeles in 2025, totaling $2.57 billion in aggregate volume, including a $211 million Amazon industrial investment by Morgan Stanley and $210 million downtown office sold by Brookfield.
Phase I ESA Activity Points to Growing Momentum in CRE Capital Flows
The latest quarterly Phase I environmental site assessment data provides an early signal of broader CRE lending and investment activity. The LightBox Phase I ESA Index eased to 93.6 in Q4 from 98.0 in Q3, a modest 9% seasonal decline that was significantly milder than historical averages. Importantly, total volume remained 18% above year-ago levels. For the full year, U.S. Phase I ESA activity grew 13%, the second-strongest annual gain since 2021 and well above the 1% growth recorded in 2024. At the metro level, Houston, Nashville, and New York City led demand growth, with Long Island and Chicago rounding out the top five, a sign that investors remain active in both high-growth and gateway markets. CRE professionals supporting CRE functions in these metros are likely seeing sustained pipeline activity as capital concentrates where fundamentals remain favorable.
LightBox Take: Heading into 2026, 75% of Market Advisory Council members expect a modest increase in Phase I ESA demand, driven by refinancing activity, disciplined underwriting, and steadier deal pipelines. The prevailing tone is pragmatic optimism: fewer fear-driven pauses, more deliberate engagement, and a market transitioning toward stability rather than rapid acceleration.
Refi Wave Lifts MBA’s Latest CRE Lending Forecast
MBA’s January 2026 forecast calls for a sharp rebound in commercial real estate lending, projecting $805 billion in total originations in 2026, a 27% increase over 2025’s $634 billion. Multifamily lending is expected to rise to $399 billion from $331 billion. The growth is driven largely by refinancing activity tied to maturing loans and a pickup in acquisitions as capital markets stabilize. While CRE fundamentals remain soft, with higher vacancies and rising delinquencies, particularly in CMBS, cap rates compressed in 2025 and values have largely stabilized. MBA expects steady, not explosive, expansion as rates remain in the 6–6.5% range and underwriting stays disciplined.
LightBox Take: While 2026 is shaping up to be a strong year for CRE lending, MBA projects a roughly 7% pullback in 2027 as the surge in refinancing activity tied to maturing loans begins to taper. Much of next year’s growth appears front-loaded, driven by borrowers locking in improved terms as rates stabilize. Once that backlog clears, origination volumes may normalize. In other words, 2026 could mark a cyclical high point, with 2027 reflecting a more measured, post-refi reset.
What’s Under the Hood of Your AI Tool?
Artificial intelligence may be the hottest topic in real estate, but its success rests on a less glamorous foundation: clean, standardized, high-integrity data. AI models require massive volumes of structured information to generate accurate insights, yet commercial real estate data remains fragmented, inconsistent, and often privately held. Many firms operate across dozens of disconnected software platforms, making normalization and governance a prerequisite to meaningful AI adoption. Industry leaders emphasize that effective AI deployment demands long-term investment in data infrastructure, standardization, and integration into business processes. In real estate, better data doesn’t just improve AI outcomes, it will determine whether they’re reliable at all.
LightBox Take: The 2026 LightBox AI Benchmark Survey concluded that environmental due diligence professionals are in the early stages of assessing AI’s applicability to assessing commercial properties for environmental risk. While 47% report using AI in some capacity, confidence remains limited. The top concern, cited by 78%, is output accuracy and reliability, followed by legal liability (61%) and data security (47%). AI earns high marks for efficiency and time savings, but only 12% view it as truly effective today. Using trusted data sources and secure, licensed tools will be critical to addressing the industry’s concerns and lack of trust.
Tighter Supply Gives Chicago Multifamily the Edge Over the Sunbelt
Chicago’s multifamily market is emerging as a quiet outperformer. Unlike many Sunbelt metros grappling with oversupply and muted rent growth after a construction boom, Chicago has seen development slowing sharply. That supply constraint is translating into pricing power, steadier rent growth, and renewed investor interest. Recent deals underscore the momentum: a $126 million Loop tower trade at $380,000 per unit, the largest multifamily sale of 2026 so far, alongside active suburban acquisitions in Naperville, Westmont, and Wheeling. While headlines once focused on outmigration, today Chicago reflects a more predictable, disciplined market where scarcity is driving performance and capital is leaning back in.
LightBox Take: Multifamily is clearly leading Chicago’s CRE recovery. LightBox’s Transaction Tracker logged 187 multifamily deals in the City of Chicago in 2025 totaling $3.06 billion, more than any other asset class. Capital is concentrating where fundamentals are strongest, and supply is constrained. Notably, major institutional buyers were active, including Tishman Speyer, Friedkin Property Group, Hines, and Normandy Real Estate.
Did You Know?
In a poll conducted by LightBox at last week’s Environmental Bankers Association conference, 48% of environmental risk managers and due diligence consultants expect two interest rate cuts this year? Another 19% are expecting three cuts, and 17% think the Fed will cut rates only once this year.
THE WEEK AHEAD
MONDAY President’s Day observed
WEDNESDAY Minutes of Fed’s January meeting, building permits and housing starts
THURSDAY Initial jobless claims and pending home sales
FRIDAY U.S. GDP and PCE Index
