Capital Markets Update
Tennessee, Virginia, North Carolina, South Carolina, Georgia, and Florida
Professional White Paper
March 2026
Market Backdrop
Commercial real estate capital markets entered 2026 in better condition than they were a year earlier, but they are still operating in a disciplined, spread-sensitive environment rather than a fully normalized one. As of March 6, 2026, the U.S. 10-year Treasury yield stood at 4.15%, and the Federal Open Market Committee had maintained the target range for the federal funds rate at 3.50% to 3.75% following its January meeting (Board of Governors of the Federal Reserve System, 2026; U.S. Department of the Treasury, 2026). That rate backdrop is not low by post-Global Financial Crisis standards, yet it is materially more stable than the 2022-2024 tightening period and has reduced one of the market's biggest obstacles: underwriting uncertainty around exit cap rates, hedge costs, and refinancing assumptions.
The broader macro setting is also constructive, if not exuberant. CBRE expects U.S. GDP growth of 2.0% in 2026, inflation averaging 2.5%, and labor conditions that are softer but not recessionary (CBRE, 2026a). In that environment, returns are likely to be driven more by in-place income, lease quality, and operational execution than by financial engineering. For investors focused on Tennessee, Virginia, North Carolina, South Carolina, Georgia, and Florida, that matters because the Southeast continues to benefit from relative population growth and durable corporate location demand, even as the capital stack remains more selective.
Debt Liquidity and the Refinance Wall
The clearest sign of improving market function is the lending outlook. The Mortgage Bankers Association forecasts total commercial mortgage originations of $805.5 billion in 2026, up 27% from the $633.7 billion expected for 2025, with multifamily originations alone forecast to rise to $399.2 billion (Mortgage Bankers Association, 2026a). In practical terms, that points to more active banks, life companies, debt funds, securitized lenders, and agency channels than the market had during the most restrictive phase of the cycle. CBRE's 2026 capital markets outlook is directionally similar, projecting healthier debt market liquidity, tighter spreads, and a 16% increase in overall commercial real estate investment volume this year (CBRE, 2026b).
Even so, the refinancing burden remains meaningful. MBA estimates that 17% of outstanding commercial and multifamily mortgage balances will mature in 2026, with particularly heavy maturity exposure in hotel, industrial, and office loans (Mortgage Bankers Association, 2026b). This is the central reason the market is improving unevenly. Quality assets with durable income and realistic leverage levels should refinance. Assets that were bought at peak pricing, that rely on aggressive future rent growth, or that face capital needs will remain vulnerable to recapitalizations, extensions, or discounted sales. Liquidity is returning, but it is returning on terms that reward basis discipline and strong property-level performance.
Sector Preferences and Pricing
Investor appetite has clearly improved. In CBRE's 2026 North American Investor Intentions Survey, 74% of investors said they plan to buy more assets in 2026 than they did in 2025, 97% said they will maintain or increase real estate allocations, and property-type preferences remained led by multifamily (74% of U.S. investors), industrial and logistics (37%), retail (27%), and office (16%) (CBRE, 2026c). That ranking is consistent with what owners and lenders are seeing in live deal flow: capital is coming back first to sectors with better cash-flow visibility and clearer financing paths.
Multifamily remains the most liquid property type, but near-term operating performance in high-supply Sun Belt markets still requires careful underwriting. Industrial remains highly investable, although the underwriting focus has shifted toward modern product, transportation access, power availability, and tenant credit rather than pure market beta. Grocery-anchored and necessity-based retail continues to benefit from limited new supply and improved pricing confidence. Office is the most selective segment of the stack. CBRE expects investor interest to broaden to well-located Class A office, yet Trepp reported that the overall CMBS delinquency rate rose to 7.47% in January 2026 and that the office delinquency rate reached a record 12.34% (Trepp, 2026a, 2026b). Those figures do not mean all office is unfinanceable. They do mean that office capital is still heavily bifurcated between prime, well-leased assets and commodity or structurally impaired buildings.
Implications for the Southeastern Focus States
For the six-state Southeast focus area, the most important takeaway is that capital is still favoring growth-oriented metros, but not indiscriminately. Atlanta ranked second among U.S. investment targets in CBRE's 2026 survey, Charlotte ranked fifth, and Tampa ranked seventh; Nashville also placed in the top 10 according to CBRE's market commentary (CBRE, 2026c; CBRE, 2026d; CBRE, 2026e; CBRE, 2026f). Those rankings matter because they indicate where liquidity is likely to be deepest, where bidding tension is most likely to return first, and where lenders will be most comfortable stretching for quality.
That dynamic supports a clear hierarchy across the region. In Tennessee, capital should continue to favor best-in-class Nashville assets and well-located industrial product with defensible rents. In Virginia, Northern Virginia remains advantaged by institutional depth, federal adjacency, and digital infrastructure demand, although underwriting must account for power and land constraints. In North Carolina and South Carolina, Charlotte, Raleigh-Durham, Charleston, and Greenville-Spartanburg continue to benefit from business migration, manufacturing, and logistics relevance. Georgia remains anchored by Atlanta's liquidity and scale. Florida continues to offer compelling long-term demand in markets such as Tampa and South Florida, but investors need to underwrite insurance, taxes, and replacement-cost volatility with greater precision than they would in inland Southeastern markets.
12- to 24-Month Outlook
Over the next 12 to 24 months, the base case for Southeast commercial real estate capital markets is constructive. Debt availability should improve further, transaction volume should continue to recover, and cap rates for multifamily, industrial, and high-quality retail assets should stabilize with selective compression where income growth is durable (CBRE, 2026b; NAIOP, 2025). At the same time, the refinance cycle is unlikely to be painless. Assets with weak tenancy, near-term rollover, heavy capital requirements, or outdated office positioning will remain the principal source of distress and recapitalization activity.
For investors, the operating playbook is straightforward. Favor assets and submarkets where income growth can carry returns even if the rate environment remains higher than pre-2022 norms. Maintain realistic leverage assumptions. Underwrite refinance proceeds conservatively. And distinguish between Southeast growth as a long-term regional theme and the very different risk profiles that exist within the region itself. In 2026 and 2027, access to capital should improve, but the market will continue to reward asset selection, lease durability, and basis discipline rather than momentum alone.
References
Board of Governors of the Federal Reserve System. (2026, January 28). Federal Reserve issues FOMC statement. https://www.federalreserve.gov/newsevents/pressreleases/monetary20260128a.htm
CBRE. (2026a, January 13). U.S. real estate market outlook 2026: Economy. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/economy
CBRE. (2026b, January 14). U.S. real estate market outlook 2026: Capital markets. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/capital-markets
CBRE. (2026c, January 29). 2026 North American investor intentions survey. https://www.cbre.com/insights/reports/2026-north-american-investor-intentions-survey
CBRE. (2026d, January 29). Atlanta among top targets for commercial real estate investment in 2026, CBRE survey finds. https://www.cbre.com/press-releases/atlanta-among-top-targets-for-commercial-real-estate-investment-in-2026-cbre-survey-finds
CBRE. (2026e, February 4). Charlotte among top targets for commercial real estate investment in 2026, CBRE survey finds. https://www.cbre.com/press-releases/charlotte-among-top-targets-for-commercial-real-estate-investment-in-2026
CBRE. (2026f, February 2). Tampa among top targets for commercial real estate investment in 2026, CBRE survey finds. https://www.cbre.com/press-releases/tampa-among-top-targets-for-commercial-real-estate-investment-in-2026-cbre-survey-finds
Mortgage Bankers Association. (2026a, February 9). MBA CREF forecast: Total commercial mortgage originations to increase 27 percent to $805 billion in 2026. https://www.mba.org/news-and-research/newsroom/news/2026/02/09/mba-cref-forecast--total-commercial-mortgage-originations-to-increase-27-percent-to--805-billion-in-2026
Mortgage Bankers Association. (2026b, February 12). MBA: 17% of commercial and multifamily mortgage balances to mature in 2026. https://newslink.mba.org/cmf-newslinks/2026/february/mba-commercial-multifamily-newslink-thursday-feb-12-2026/mba-17-of-commercial-and-multifamily-mortgage-balances-to-mature-in-2026/
NAIOP. (2025, October 16). The NAIOP CRE sentiment index. https://www.naiop.org/research-and-publications/sentiment-index/
Trepp. (2026a, February 2). CMBS delinquency rate increased to open 2026 as office sector drives gains. https://www.trepp.com/trepptalk/cmbs-delinquency-rate-increased-to-open-2026
Trepp. (2026b, February 19). Office CMBS delinquency hits an all-time high: What the data is really saying. https://www.trepp.com/trepptalk/office-cmbs-delinquency-hits-an-all-time-high-what-the-data-is-really-saying
U.S. Department of the Treasury. (2026, March 6). Daily Treasury par yield curve rates. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?field_tdr_date_value=2026&type=daily_treasury_yield_curve
