Commercial Real Estate Cycle 2026: Still Early Innings | Ryan Severino, BG

Six years into the expansion, the commercial real estate cycle still looks early. Michael Bull, CCIM covers 2026 rates, supply, and office with BGO Chief Economist Ryan Severino, CFA.

Ryan Severino, CFA, Chief Economist and Head of Research for the U.S. at BGO, explains why a cycle that is six years old still behaves like an early to mid cycle expansion. Debt sits at moderate levels, the labor market has room to run, and leverage has stayed disciplined. He sees runway left in the economy and in commercial real estate.

The conversation covers where inflation and interest rates go from here, why the 10-year Treasury has trouble moving far off 4% on fundamentals alone, and how trade policy and the conflict in Iran are adding roughly 30 to 60 basis points to the long end of the curve. Severino also makes the case that today's rates only feel high because most people working in this industry have spent their entire careers in a market where the 10-year stayed below 5% for a quarter century.

On the property side: the construction pipeline is the most benign on record relative to existing inventory, which means owners no longer need an outsized jump in demand to compress vacancy and restart rent growth. Severino explains why he is more constructive on office than most of the industry, drawing a direct comparison to how wrong the popular narrative on retail was for 15 years. Michael Bull adds a live example, a 17-story tower coming to market at $64 per square foot, below the cost of building out the space.

The episode closes on what Severino calls a recovery out of order. In a normal cycle, capital markets recover first and space market fundamentals lag. This time fundamentals are recovering while elevated long-term rates hold the capital markets back. His view on the next 12 to 24 months: higher transaction volume, more attractive pricing, and a real estate return profile that compares well against a richly valued stock market.

In this episode:
00:00  Where Are We in the CRE Cycle? What Inning Are We In?
01:08  Six Years In and Still Early Cycle: The Rain Delay Economy
03:17  Pandemic, Inflation, Trade War, Real War: A Fits and Starts Cycle
04:39  Inflation Resurgent: A Speed Bump, Not a Roadblock
06:37  The 10-Year Treasury: Why It Cannot Move Far Off 4%
07:58  A Quarter Century Below 5%: Today's Rates Are About Average
09:26  Michael's 17% Loan and Making Money at Higher Rates
10:28  Oil Prices and Iran: Why the U.S. Economy Shrugs Now
12:46  AI and Data Centers: Galactic Capital and Political Backlash
15:02  Record Low Construction: Why Supply No Longer Drives the Cycle
17:57  Office: The Contrarian Case and the Retail Playbook
20:07  A 17-Story Tower at $64 per Foot
20:42  Recovery Out of Order: Fundamentals First, Capital Markets Lagging
24:47  Relative Value: Real Estate Against a Richly Priced Stock Market
25:57  Final Takeaway: You Do Not Pay Today's Rate Forever

Connect with Ryan Severino:
https://www.linkedin.com/in/ryan-severino-cfa-4409022/
BGO Website: https://www.bgo.com

Connect with Michael Bull & The Show:
Michael Bull, CCIM
Bull Realty, Inc
https://www.linkedin.com/in/michaelbull/

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