Key findings
AI-enabled operating platforms are commanding valuation premiums.
Capital continues shifting toward digital infrastructure, logistics, and residential-oriented sectors.
Convergence across real estate, infrastructure, and operating platforms continues to accelerate.
REIT consolidation and take-private activity are reemerging.
Private credit and structured capital remain key transaction enablers.
The US real estate market continues to diverge between operationally advantaged platforms and structurally challenged legacy assets. Rather than waiting for a broad cyclical recovery, investors are concentrating capital in sectors supported by long-duration secular demand drivers, including data centers, logistics infrastructure, senior housing, renewables, student housing, and other residential-oriented platforms. These sectors are increasingly evaluated through an infrastructure and operating-company lens, reflecting the growing overlap among traditional real estate, digital infrastructure, supply chain networks, advanced manufacturing, and operational services businesses.
This shift is changing how investors evaluate acquisitions and platform value creation. Investors are prioritizing platform scalability, infrastructure access, digital capabilities, and data capabilities alongside traditional real estate fundamentals such as location, tenancy, and replacement cost. Assets capable of supporting scalable operating models, dynamic pricing, and integrated technology infrastructure are attracting stronger investor interest and tighter financing conditions. In contrast, assets lacking operational flexibility or a credible technology roadmap are facing longer diligence timelines, greater valuation pressure, and reduced financing availability.
AI is becoming a more important factor across the transaction life cycle. Buyers, lenders and institutional investors are assessing AI readiness during diligence through operational reporting, data architecture, workflow automation, forecasting capabilities, and asset-level decision infrastructure. This is particularly relevant across operationally intensive sectors where technology-enabled efficiencies can influence margins, occupancy optimization, pricing, and scalability. AI is also increasingly influencing sourcing, underwriting, operational diligence, and post-close integration planning, reinforcing valuation dispersion between scalable platforms and technologically constrained assets.
At the same time, elevated financing costs and infrastructure constraints continue to create transaction friction across parts of the market. Power access and infrastructure availability have become critical gating issues for digital infrastructure transactions and development pipelines. Refinancing pressure across portions of the office and legacy retail market also continues to weigh on transaction activity and valuation certainty. Assets facing declining demand fundamentals, elevated capital expenditure requirements, or weaker leasing outlooks continue to experience heightened valuation pressure and reduced financing flexibility.
Public-to-private REIT transactions are also reemerging as a notable market theme. Persistent discounts to net asset value across many mid-cap REITs, combined with growing concentration among the largest listed platforms, are creating opportunities for consolidation and strategic repositioning. Widening cost-of-capital disparities are increasing pressure on subscale-listed platforms to pursue consolidation, strategic asset sales, and take-private transactions. Scale, operating sophistication, and capital access are increasingly differentiating market leaders from structurally challenged platforms.
Private credit and structured capital continue to play a growing role in transaction execution as insurance companies, pension investors, and alternative asset managers expand allocations to real estate-backed debt, preferred equity, and hybrid capital solutions. Flexible and prearranged capital structures are becoming table stakes in competitive processes. Buyers able to deliver fully engineered and pre-arranged capital solutions are increasingly gaining an advantage, with certainty and speed of execution becoming differentiators alongside pricing.
Cross-border capital flows are also becoming more thematic and sector-selective. While inbound foreign investment into US real estate remains selective, US investors continue increasing outbound exposure to markets including the Nordics, the UK, and Germany, particularly across digital infrastructure, renewables and residential-oriented sectors. Transactions such as Apollo’s acquisition of STACK Infrastructure continue to reinforce investor appetite for scalable, infrastructure-oriented real asset platforms supported by durable infrastructure and demographic trends. Institutional and sovereign capital also continues prioritizing scalable operating platforms capable of supporting long-duration capital deployment strategies.
Together, these trends reinforce a broader convergence theme across the market, with investors increasingly underwriting assets as integrated operating and infrastructure platforms rather than standalone property investments. The sector’s overlap with digital infrastructure, supply chain networks, sports and entertainment venues, and advanced manufacturing footprints continues to expand as scalable operating models and infrastructure access become increasingly central to investment theses.
What began as a convergence thesis is becoming an operating reality, reshaping how investors source opportunities, structure capital, and evaluate long-term platform value creation across the sector. Management teams, operational data capabilities, infrastructure access, and technology readiness are increasingly becoming central diligence considerations as investors evaluate platform scalability and long-term competitive positioning
Key M&A trends set to influence real estate and real assets
Capital rotation toward infrastructure-oriented sectors is expected to remain a defining theme during the second half of 2026. Investors continue prioritizing sectors supported by long-term secular demand drivers, including data centers, logistics, senior housing, and residential rental housing. These sectors are being evaluated through an operational and infrastructure lens rather than as traditional real estate investments. Digital infrastructure, power access, and operational scalability are becoming central underwriting considerations across these sectors.
AI adoption is also expected to influence valuation outcomes, transaction execution, and operational integration planning. Buyers are placing greater emphasis on technology-enabled operating capabilities, operational transparency, and scalability during diligence processes. This is becoming visible in underwriting, operational due diligence, and post-close integration planning. Platforms lacking scalable technology capabilities may face valuation pressure and elongated execution timelines.
At the same time, private credit providers, insurers, and pension investors are continuing to play a critical role in supporting acquisitions, recapitalizations, and refinancing activity as traditional bank lending remains selective. Sovereign wealth funds and large institutional investors continue to prioritize scalable platform investments capable of supporting long-duration deployment strategies. Sponsors capable of flexible and fully engineered capital solutions are better positioned in competitive transaction environments.
“We expect transaction activity to continue improving through the second half of 2026, particularly across operationally intensive and infrastructure-adjacent sectors.”
Tim Bodner,PwC US Real Estate Deals LeaderThe bottom line: What real assets and real estate dealmakers should watch
Real estate dealmaking is being driven by operational convergence across infrastructure, technology, and real asset platforms. Investors should closely monitor AI-enabled operating differentiation, capital availability, and continued sector rotation toward infrastructure-aligned assets supported by durable secular demand drivers. Power availability, data infrastructure, and access to flexible capital are shaping both valuation outcomes and transaction execution certainty. As capital prioritizes scalability, operational transparency, infrastructure access and digital operating capabilities, integrated operating platforms are expected to continue attracting disproportionate investor interest, strategic capital flows, and elevated M&A activity across the sector. The growing convergence between real estate, infrastructure, and operating businesses is increasingly reshaping how investors evaluate long-term platform value creation and competitive positioning across the market.
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